By Andy Home <\/p>\n
LONDON (Reuters) - Supply, or rather the lack of it, has once again dominated the agenda of the annual CESCO Week gathering of the copper industry in Chile. <\/p>\n
As the industry faces an uncertain short-term demand outlook, the CESCO narrative has reverted to the certainty of copper's problematic supply-side dynamic. <\/p>\n
And the lack of supply has been the main theme in London copper trading this week as well. <\/p>\n
The London Metal Exchange (LME) contract has witnessed the most acute squeeze on availability in over three years. <\/p>\n
The benchmark cash-to-three-months period was valued Tuesday at $114 per tonne backwardation. The last time it was anything like that on a closing basis was October 2008. <\/p>\n
As ever it has been those shorts caught drinking in the last-chance saloon - that is the LME's \"tom-next\" spread - who have paid the highest price. It traded as wide as $40 per tonne backwardation at one stage on Tuesday morning. <\/p>\n
BIOMECHANICS <\/p>\n
The mechanics of what happened this week, which included the prime \"third Wednesday\" April prompt date, are easily enough explained thanks to the exchange's daily positioning reports. <\/p>\n
They showed that as of the Monday close, one player held cash and \"tom-next\" positions representing somewhere between 50 and 80 percent of available stocks. <\/p>\n<\/p>\n
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\nLME copper, the anatomy of a squeeze: Andy Home<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"