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Albert Sung is the author of the Katchum Macro-Economic Blog, monitoring breaking economic news from a day to day basis. He started investing in 2008 because of the economic crisis and holds a masters degree in chemical engineering. Previously, he worked several years as a process engineer at... More
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  • Copper Contango Report 0 comments
    Jul 7, 2012 5:11 AM | about stocks: CUPM, JJC

    I decided to start monitoring the contango-backwardation curve of copper (Chart 1). In a previous article I noted a pretty significant correlation between contango and price of copper.

    We see that the negative correlation between copper price and 1 yr futures contango is still existing. But it's difficult to predict the price of copper, because the contango curve and the price curve are almost exactly following each other. We could say we almost have a 100% correlation here.

    But, something weird happened on 14 May 2012 though, where the copper price was in steep backwardation, but the copper price didn't go up... So there still are discrepancies in this correlation.

    Let's see if this monitoring of the copper contango will bring new ideas.

    Chart 1: Copper Price-Contango (USD/lb)

    Stocks: CUPM, JJC
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