LME warrant trade stifled by backwardations; nickel briquette premium up on tightness, steady interest

Backwardations in the forward curves of most metals on the London Metal Exchange have constrained warrant trading for the past few weeks.

Copper warrants, for example, have been "impossible" to trade since steep backwardations emerged in copper's forward curve in mid-October, traders widely agreed.
Its cash/three-month spread was recently at a $190 per tonne backwardation on Thursday November 4, having been as wide as $350 per tonne on Wednesday and a record $1,010 per tonne on October 18.
Further along the curve, December 2022-December 2023 was backwardated at $120 per tonne on Thursday.

"There is no value in borrowing the spreads to get hold of the warrants without the certainty of being able to ship them after," one warrants trader based in London said.

The LME copper warrant premium in Asia has held steady at $25-40 per tonne since early September when the three-month price spiked while stocks were being drawn down from...

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