LME copper cash premium hits $545, widest backwardation since 2021

August 19, 2026 at 06:28 PM2 min

This digest was compiled by AI from multiple sources — links to the originals are below.

The LME copper cash premium over three-month delivery surged to $545 per metric ton on Monday, the widest backwardation since 2021, while cash copper hit a record $14,912 a ton. The squeeze eased after 38,150 tons of copper were delivered into LME warehouses over the last three days, including 5,000 tons in Hong Kong and 17,300 tons in Baltimore and New Orleans. Live LME stocks remained at 103,075 tons as three entities held large long positions ahead of Wednesday's prompt date.

Key Facts

LME total copper stocks closed last week at a six-month low of 207,825 tons, with live stocks at 103,075 tons after almost half the inventory was cancelled warrants.
The LME tom-next spread, the cost of rolling a position one day forward, hit $110 per ton on Tuesday morning.
Three entities held large long positions ahead of the cash crunch: one with 30-40% of warranted stocks and two with 50-80% each.
CME warehouses in the U.S. accounted for 58% of global exchange copper inventory at the end of July.
U.S. warehouses accounted for 37% of LME total registered inventory and 79% of off-warrant inventory at the end of last month.

The Flash Squeeze

The London Metal Exchange copper contract entered a summer storm as the cash premium over three-month delivery ballooned to $545 per metric ton on Monday. The cash price registered a new record high of $14,912 per ton. The LME's tom-next spread, the cost of rolling a position one day forward, exploded to $110 per ton on Tuesday morning. This week's turbulence resulted from a clash of positions around Wednesday's prime August prompt date. Three entities held large long positions ahead of the cash crunch: one with 30-40% of warranted stocks and two with 50-80% each.

Copper Warehouse Deliveries

A total of 38,150 tons of copper was delivered into the LME warehouse system over the last three days. Deliveries included 5,000 tons in Hong Kong and 17,300 tons in Baltimore and New Orleans in the United States. LME stocks closed last week at a six-month low of 207,825 tons, with almost half of that inventory in the form of cancelled warrants. Live stocks were just 103,075 tons.

CME-LME Arbitrage

Most of the world's exchange stocks of copper are located in the United States because of the CME premium over the LME price. CME warehouses in the U.S. accounted for 58% of global exchange inventory at the end of July. U.S. warehouses accounted for 37% of LME total registered inventory and 79% of off-warrant inventory at the end of last month. The burst of warranting activity caused time-spreads to ease.