Copper futures rose for a third day in London as a shortage worsened, making the metal for immediate delivery 6 percent more expensive than for delivery in three months, the biggest gap in eight years.
Copper for immediate delivery on the London Metal Exchange was offered at $209 a metric ton more than the contract for delivery in three months, a level last seen in July 1997. In a market with adequate supply, prices are higher for later delivery to recover costs including storage and interest.
Two market participants hold most LME-monitored copper stocks as of May 31, according to the exchange’s Web site.
The shortage of LME copper will deepen if “the holder of much of he stocks is about to take delivery and ship the metal to China,” MacMillan said, referring to a speculation circulating on the LME.
Stockpiles monitored by the Shanghai Futures Exchange, second to the LME in terms of copper futures trade, fell 30 percent from a week ago to 19,848 tons, a 4-week low. China is the world’s largest copper consumer.