Copper Races to Record Highs
Historically elevated short positions are coming under pressure from near-term supply tightness, sending CMX copper prices to all-time highs and inviting new risks to cash flow predictability.
Mobius Intel Brief:
COMEX copper prices surged to all-time intraday highs today, with front-month high-grade copper peaking at $5.178/lb or $11,416/metric ton. Production cuts, mine closures, and Russian sanctions have eroded an expected supply surplus for 2024, with the more transparent LME warehouse copper stocks down double-digit percentage points YTD.
COMEX copper settled up nearly 28% YTD and over 9% week-on-week as a massive wave of long bets from mid-February pressured historically high short holdings, accelerating upside momentum as money managers race to cover positions. Copper’s role in the new era of power demand has propelled trading volume to all-time highs this week, simultaneously expanding price volatility and risks to cash flow predictability.
Insights Pro: A Closer Look at Copper’s Rally, Warehouse Stocks, Speculator Positioning, and Curve Structure.
COMEX copper futures surged to all-time intraday highs today, the downstream result of a massive wave of long bets pressuring historically elevated short positions.
Copper’s conductive properties and increased relevance in the new era of power consumption have attracted attention in recent months as hedge funds and other traders anticipate record demand for the metal. Open interest in copper derivatives on the CME group’s COMEX has soared to the 99.8th percentile over the trailing 10-year period.
While Bloomberg and Reuters reported today’s price action as a short squeeze, a closer look at spec positioning reveals a more notable shift in money managers' long bets from mid-February.
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