The convenience yields of copper in the LME now reflect critically low inventories, says Daniel Ghald, senior strategist of TDS raw materials.
Copper tension increases
“The metal has left the system in recent months, reflecting greater competition for physical copper of both China and the United States.”
“We emphasize that the metal must return to the system to prevent the fears of a shortage from resurfaceing, and although the Tom-Next is now being negotiated near the maximum LME rate, curiously, the largest operators in Shanghai have increasingly sold their copper positions concurrently with a fall in the Chinese premiums.”
“Copper operators in Shanghai also remained on offer in the night session, with the sale activity now totaling 84.5 kt of nominal copper to date. In this context, it is notable that deliveries to the system have remained scarce. However, for the moment, the activity of purchase of CTA could further exacerbate the pressure on the flat prices of the LME and the curve.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
