London Metal Exchange copper inventory sharply declines, buyers face tight supply.

Buyers on the London Metal Exchange are facing tight supply of copper, leading to a spike in spot copper prices as traders compete for dwindling copper stocks in the exchange's warehouses. On Tuesday, contracts expiring in one day were commanding a premium of $36 per ton over contracts expiring the following day, marking the widest spread since the historic supply crunch of 2021. Although this so-called tomorrow/next-day spread saw a slight decline near the close of trading, other medium to long-term spreads continue to tighten. Despite months of tightening copper supply, buyers are set to face peak supply constraints on the eve of the expiry of the LME's June contract on Wednesday. If short position holders hold on until expiry, they will need to deliver copper, and the surge in tomorrow/next-day spread reflects the rising cost of postponing delivery obligations by one day.