Copper Shorts Squeezed as July Comex Futures Soar

A sudden surge in copper prices on the Comex exchange has left traders scrambling to deliver metal to the US, according to a recent Bloomberg article carried on Yahoo! Finance.

Michael Cuoco, head of hedge fund sales for metals and bulk materials at StoneX Group, provided insights into the market dynamics, stating, "Short spread and futures holders are being squeezed."

July copper futures have jumped by more than 7% this week, trading at a record premium over later months and at unprecedentedly high levels compared to copper on other global commodities exchanges.

The article highlighted several key points:

• The sharp price move has been tightly focused on the most-active July contract on Comex
• The expanded premium of the July price over copper on other global exchanges is prompting traders to arrange shipments to Comex warehouses in the US
• The short squeeze is expected to continue as traders may struggle to ship enough metal ahead of the delivery date

Sources note that the surge on the July contract was partly due to a squeeze on traders engaged in a "reverse arbitrage trade," going short on Comex and long on Shanghai copper.

Cuoco assessed, "these are rich values…we expect participants to take profits off the table or to roll positions forward."

Dive deeper into base metals with StoneX

Michael Cuoco and the StoneX team are dedicated to providing you with the latest market intelligence, analysis and risk management solutions to help you make informed decisions in the ever-changing landscape of base metals trading.

For more insights into the world of base metals and to connect with the team, visit the Base Metals page on the StoneX website

To read the original article on Yahoo! Finance, click here.