The doubling of the spot copper price since January to more than $6,000 a tonne have taken the headlines in the base metal market. But it is the price movements in copper far forward contracts that have been even more dramatic.
The London Metal Exchange 63-month copper price – a traditional forward contract benchmark – jumped earlier this month to $5,861 a tonne, approaching its all-time high of $6,998 a tonne set in May 2008, and its highest level for almost a year.
Copper bulls note that the last time the red metal's forward prices were so high the spot contract traded higher than $8,000 a tonne, well above its current level. Although far forward prices are considered merely an indicator of future price movements, analysts agree they nonetheless provide useful hints about current market psychology.