Following a historic squeeze last month, the spot price of copper in New York has once again significantly exceeded the futures price, putting more pressure on short positions holders. In July, the New York Comex copper contract for delivery was priced at a premium of 7.4 cents per pound compared to the September contract, a situation known as a spot premium, which typically indicates a supply shortage. Last month, the spot premium reached an unprecedented 29.25 cents, putting enormous pressure on commodity traders and investors holding short positions in the July contract.

The copper contract for delivery in July on the New York Comex was priced at a spot premium of 7.4 cents per pound to the September contract, indicating a supply shortage. Last month, the spot premium reached an unprecedented 29.25 cents, putting tremendous pressure on commodity traders and investors holding short positions in the July contract. Although global copper supply is generally sufficient, the equivalent spot contract trading prices in Shanghai and London are significantly discounted compared to the futures prices. However, the inventory of copper in Comex warehouses has fallen to the lowest level in 15 years, and last month's shortage forced traders to scramble to find and ship selected brand copper that could be transported to the United States to mitigate their risk exposure. If they can't find enough copper, they may need to buy off the contracts and run the risk of pushing the July contract to a higher price during the process.

The rapid price divergence less than six weeks before the contract expires indicates that many short-position holders have not yet filled their positions. For investors who cannot deliver, a spot premium means they will face losses when they repurchase their short positions and extend them to a later date. To exit the contract, they must obey the dictates of long-position holders. Copper bulls continue to bet heavily. This year, the investment of fund managers bullish on copper has increased significantly, which has to some extent fueled the squeeze of shorts and helped the New York copper contract reach a historic high. The London and Shanghai prices of copper also quickly soared to record levels, but in recent weeks, as some investors have taken profits and concern over the prospects of recent demand has intensified, prices have fallen back.

There is a significant price divergence less than six weeks before the contract expires, indicating that many short position holders have yet to fill their positions.

For investors who cannot deliver, a spot premium means they will face losses when they repurchase their short positions and extend them to a later date. To exit the contract, they must obey the dictates of long position holders.

This year, the investment of fund managers bullish on copper has increased significantly, which has to some extent fueled the squeeze of shorts and helped the New York copper contract reach a historic high. The London and Shanghai prices of copper also quickly soared to record levels, but in recent weeks, as some investors have taken profits and concern over the prospects of recent demand has intensified, prices have fallen back.

Editor/Somer