No squeeze on copper, says LME
Dec 06, 2010 | 11:48 AM
The large position holder in copper is not squeezing the market, the London Metal Exchange said, pointing to the fact that nearby dates are trading in a contango.
"Suggestions that the current large positions in copper have caused prices to rise are misleading," an LME spokesman told AMM sister publication Metal Bulletin.
One market participant holds between 50 and 80 percent of copper warrants, cash and tomorrow/next positions, according to LME data last week. This caused concern as it followed three-month prices hitting an all-time second-ring high of $8,920 per tonne on Nov. 11 and the cash-to-three-month backwardation widened to $89 on Nov. 30, the highest level since August 2008.
"Although the cash-to-three-month price is backwardated, it is not backwardated in the nearby dates," the LME spokesman said. "Currently, the TOM/next is trading in a contango; were there a shortage of metal in the market you might expect there to be a backwardation—a premium to trade those nearby dates."....
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