An interesting 24 hours of copper trading.
Last night saw SHFE trying to cap the bull run in copper for the first time, the narrative along the lines of that proposed by Clyde Russell of Reuters earlier this week:
What the INE flip to a discount to the LME contract suggests is that traders in the Chinese market are selling copper into the rally, perhaps to take advantage of the current high price.
Chinese traders have been known to buy metal when they deem the price cheap and then hold it in so-called dark warehouses, which are stocks not visible to trading exchanges, and then release their inventories when prices rise.
This process may account for the current end of the premium of INE futures to LME contracts, but there may also be some concern in China about the relative strength of the outlook for copper.
Seeing copper trade strongly today in Comex hours has the look of the beginnings of a battle.