LME copper moves into backwardation amid talk of long-short struggle, warrant play

The front end of the copper price curve moved into a clear backwardation on the London Metal Exchange on Friday September 28, as sources reported strong volumes traded on the October-November spread.

Around 1,800 lots had traded on the Oct-Nov spread by around 15:30, on top of around 500 lots traded in the ring, pushing the spread into a $7 backwardation, sources told Metal Bulletin. The spread was in a $1 backwardation at the close of trading on Thursday. As the spread flared out, sources offered varying explanations for the tightness, including rumours that a large fund has been caught short and is borrowing now to avoid exposure closer to the October prompt date. A second explanation is that a trader is looking...


Mark Burton

September 28, 2012

16:45 GMT