Plummeting Global Demand Sends LME Copper Contango To 20-Year High

Published: May 25, 2023 17:59

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LME copper contango has risen to its widest level in nearly two decades as global demand for the metal has plummeted.

Copper futures for delivery in two days were at a $66 contango to those for delivery in three months, the widest spread since 2006, data from the London Metal Exchange showed on Monday.

Often referred to as "Dr. Copper" for its ability to gauge the health of global markets, copper is widely used in construction, infrastructure and household appliances. The sharp fall in spot copper prices reflects a sharp drop in global demand for industrial metals as industrial activity in the U.S. and Europe has begun to slow after central banks have aggressively raised interest rates over the past year, and industrial activity in Asia has yet to rebound as expected. Metal inventories in LME warehouses are building rapidly.

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