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Global exchange stocks, comprising those in LME, CME and Shanghai Futures Exchange warehouses, have fallen for the last two months.

They stood at a cumulative 232,550 tonnes at the end of October, down 30,000 tonnes since the start of 2021 and down almost 150,000 tonnes from October 2020. Shanghai stocks currently total less than 50,000 tonnes.

Copper for delivery in December fell 0.5% on the Comex market in New York, touching $4.30 per pound ($9,461 per tonne) on Thursday afternoon.

Copper squeeze
While futures prices are tumbling as the outlook for demand deteriorates, short-term copper contracts are once again trading at a huge premium to futures in London.

Premiums for spot contracts hit record levels last month, in a condition known as backwardation (prompt delivery metal pricier than futures) that signals spot demand is far outpacing supply.

“It is fair to say that there is some sort of storm brewing for the metals,” Malcolm Freeman, a director at brokerage Kingdom Futures, told Bloomberg.

“The key question is when will it break?”