November 12, 2021

Short-term copper demand may stall due to extreme market backwardation.

Some Chinese customers of major copper producer Codelco are foregoing purchases of copper due to extreme market backwardation. Backwardation is market jargon for when near-term prices are more expensive than prices farther in the future. According to Reuters, Codelco recently required a $105 premium over LME on some 2022 purchases. Copper prices in the short-term may stall if more end-users seek to defer purchases. (11/12/2021)

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