Blowout in Chicago/London arbitrage has copper market looking to US

An arbitrage between two of the world's main copper contracts has had the market chasing shadows over the week ended Wednesday July 28.

On July 26, the Comex active (September) contract traded at more than $300 per tonne above London Metal Exchange price levels for the month to date, in what was a record spread between the two contracts.
The massive premium came at the end of a month in which the Chicago prompt contract has consistently traded above the London value, and with the futures market pricing a gap between the two for at least a year.
But the unusual switch also reflected a growing market trend; investors globally were turning in greater numbers to the United States as the world's main source of expected industrial growth, more than had been expected by a copper market that was still splintered by soaring logistics costs.

"There are two sides of the coin," Citi metals analyst Oliver Nugent told Fastmarkets. "The US is tight, really calling out for incremental units, but you've also...

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