Copper: After COMEX copper forced the warehouse

Gold Ten Futures, May 15th, May 14th, the volume of copper futures on the Chicago Mercantile Exchange (COMEX) soared, and the benchmark contract approached its historical peak. The intraday high of copper in July is just one step away from the all-time high of $5.0395 set in March 2022. < br > 1. Comex copper appears to be experiencing a tight position for July. From COMEX copper itself, the July contract is 29.25 cents per pound higher than the September contract, which is an unprecedented far and near inversion spread. This may cause multiple positions to be moved to subsequent contracts, earning a premium for near-month contracts. At the same time, we noticed that the local copper spot premium in the United States has exceeded $300/ton, which confirms the unprecedented tight position of comex copper in disguise. < br > 2. Since the end of last year, the shortage of global copper mine supply has caused the processing cost of copper concentrate to drop to a historical low, especially the TC zero-order quotation in China has turned negative. From the perspective of the three major exchanges themselves, the LME and the previous period are relatively abundant in inventory, and do not form a tight position condition. Considering the short-term extreme tight position of Comex, it is only a chip in the rising copper price. < br > 3. From the perspective of arbitrage, the comex tight position market is more sustainable. The main force has a large risk of price spread regression in July. It is not suitable to operate with the LME and domestic price comparisons. It is more recommended to use the September contract for internal and external operations.