Copper Price Forecast: LME Squeeze Unwinds Toward $6.30
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Key Points:
- LME copper's cash-to-three-month backwardation halved from $535 to $255 as warehouse stocks jumped 15,725 tonnes, signaling the squeeze may be unwinding.
- COMEX holds about 667,200 tonnes of copper, while speculative net length equals roughly 911,585 tonnes, leaving positioning crowded as the U.S. tariff premium fades.
- The bearish base case targets COMEX copper at $6.30 into the September LME expiry and $6.18 in Q4, while a close above $6.90 would invalidate the setup.
Two exchanges spent this week telling opposite stories about the same metal. London copper cash settled at $14,850 a tonne on 17 August, $535 over three-month, the widest that spread has been since 2021. The next session the front cracked: cash gave back $515, the spread halved to $255, and COMEX copper settled down nearly 2% at $6.49 a pound. Below, I will lay out why those two facts are one fact, and why the London squeeze is a story about geography.