Has the Copper Market Hit Bottom? Bets Against It Have Reached a New LME High

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A key signal in the copper market is starting to flash green, with bets that copper prices will continue to fall recently hitting a record high on the London Metal Exchange, though they’ve since started to fall back. For some, that suggests the red metal’s fortunes may be about to turn. At these levels, there’s simply no more stomach to bet against copper, they say.

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“People have kind of run out of ammunition,” Guy Wolf, global head of market analytics at Marex Spectron, a broker, told the Wall Street Journal. “There’s no more new money to come in.”

According to Marex Spectron, there were 130,000 lots that were bets that copper would fall on Jan. 29. That was equivalent to 76% of all copper contracts registered with the LME, a record high, above even the bets made against copper during the global financial crisis of 2008, according Wolf.

At $5,805 per metric ton, the copper cash price moved up 1.6% on Thursday, February 26, making it the day’s biggest mover on the LME. Also on the LME, the copper 3-month price increased 1.3% to $5,782 per metric ton.

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At JPY 712,000 ($5,991), the cash price of primary Japanese copper finished the market day up 0.7% per metric ton. After improving for two days, the price of US copper producer grade 122 declined 0.3% to $3.42 per pound. The price of US copper producer grade 110 closed at $3.42 per pound. Following a couple days of improvement, the metal’s price weakened by 0.3%. The price of US copper producer grade 102 fell 0.3% to $3.61 per pound.

Chinese copper prices were flat for the day. The price of Chinese copper bar saw little movement at CNY 42,800 ($6,838) per metric ton. For the fifth day in a row, the Chinese copper cash price remained essentially flat at CNY 43,000 ($6,870) per metric ton. The price of Chinese copper wire was unchanged at CNY 41,880 ($6,691) per metric ton. The price of Chinese bright copper scrap remained essentially flat at CNY 33,400 ($5,336) per metric ton.

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