Discount for LME cash copper contract vs 3-month forward hits record

The discount for the cash copper contract against the three-month forward CMCU0-3 on the London Metal Exchange (LME) hit a record high of $137.99 a metric ton on Wednesday.

This compares with a discount or contango of around $71 a ton on April 29 and suggests receding worries about availability on the LME of copper used to conduct electricity.

Industry sources say Chinese copper producers plan to export up to 100,000 metric tons of metal over the next few weeks, the largest volume in 12 years, aiming to cool a rally that has propelled prices towards record highs and hit their order books.

Benchmark copper CMCU3 on the LME hit a two-year peak of $10,208 a ton last week, close to the record high of $10,845 touched in March 2022, partly driven by expectations of accelerating demand growth for electric vehicles.

Demand from new technologies such as artificial intelligence and automation is also expected to contribute to shortages of the industrial metal.

The benchmark copper contract was trading around $9,900 a ton at 1525 GMT as a stronger dollar persuaded funds to take profits on long positions — bets on higher prices.
Source: Reuters (Reporting by Pratima Desai; editing by Kirsten Donovan)