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Trafigura, IXM caught in Comex copper short squeeze as prices hit record

15th May 2024

By: Reuters

  

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Commodity traders Trafigura and IXM are seeking physical copper to cover large bearish positions on the CME, where US copper prices surged to record highs on Wednesday, five sources with direct knowledge of the situation said.

A short squeeze occurs when parties betting on lower prices are forced to buy back their positions at a loss or deliver physical copper to close them out.

Copper prices on COMEX, part of the CME Group, HGc1 hit a record peak of $5.18 a lb and was down 0.6% at $4.93 at 16:13 GMT, gaining 28% so far this year and 14% in the last week.

"Trafigura is one of the largest physical suppliers of copper to North America and given the premium in this market we are shipping larger quantities of the metal to COMEX," the Swiss-based trader said

IXM, owned by China's CMOC, declined to comment. The CME did not immediately respond to a request for comment.

Further gains for copper prices on the CME are likely as shipments from South America and Australia will take time to arrive in the United States, allowing those with bearish or short positions to close them out, the sources said.

Swiss-based commodity trader IXM is one of the world's largest traders of physical non-ferrous metals.

Edited by Reuters

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