Record Shanghai copper deliveries re-ignite lost cash-and-carry trade

The market of last resort has just re-ignited copper’s cash-and-carry trade in China for the first time since 2018.

Shanghai Futures Exchange copper futures have been trading in a deep contango following the delivery of 106,959 tonnes of copper cathodes onto the SHFE over the past two weeks - the biggest fortnightly inflow on records stretching back to 2003.
“Recently, the February to March carry is over 200 yuan ($29) contango – that’s full carry, enough for almost all market players to hold cargoes,” a Shanghai-based copper trader told Fastmarkets.

With China’s copper industry and logistics network at a standstill over the novel coronavirus (2019-nCoV), the contango curve has become a lifeline for copper traders who lack buyers for cathode and have been able to profit from...

Published

Archie Hunter

February 17, 2020

15:24 GMT

London