China's Shanghai Futures Exchange copper contract is backwardated, meaning the market is pricing short-term copper above that of the future.
Meanwhile the London Metal Exchange forward curve is in a steep contango; cash contracts are trading well below those for delivery in the future, an indication of near-term oversupply.
With Shanghai May copper squeezed higher and LME cash being dumped by the market, an arbitrage has opened to the extent that traders are paying 17-month high premiums to bring cathodes into China from Shanghai's bonded warehouses.
But copper's differing curves also serve to reflect starkly different economic expectations in China and outside, while also indicating the supply chain difficulties in fueling a recovery with needed commodities.
"Western economies are in lockdown and the Chinese economy is reopening with delayed restocking activity," Fastmarkets analyst Boris Mikanikrezai said.
"You have inventories...