LME 0-3 Copper Backwardation Surged to above $1,000/mt on Oct 19

SHANGHAI, Oct 20 (SMM) – LME 0-3 copper backwardation surged to $1103.5/mt in the previous trading day (Oct 19), and the import losses recorded 500 yuan/mt over SFHE 2111 contract mainly due to the overly high proportion of cancelled warrants, which worried the market a lot. A strong backwardation will result in higher costs in the change of the most-trade futures contract, and the market participants will refuse to take in the warrants. In other words, the warrants have lost its liquidity. According to SMM research, some smelters have decided to export copper cathode amid great spot import losses.

As of today (Oct 20), the traded prices of high-quality pyrocopper warrants stood at $100/mt, $100/mt for mainstream pyrocopper, $90/mt for hydrocopper. The bill of lading prices for high-quality pyrocopper warrants stood at $105/mt, $100/mt for mainstream pyrocopper, $87/mt for hydrocopper