METALS-CME copper near record highs as shorts roll positions forward

(Updates official prices) By Julian Luk LONDON, May 16 (Reuters) - Copper prices on the Chicago Mercantile Exchange hovered near record highs on Thursday as buyers piled in expecting further gains due to sellers not being able to deliver the metal against their positions and having to roll them forward. CME copper HGc1 hit a record high of $5.1775 a lb, or $11,414 a metric ton on Wednesday. It was down 1.4% at $4.9025 a lb at 1606 GMT on Thursday. One trader said those with short positions had decided to postpone closing their positions beyond June. Short positions can be bets on lower prices, or producers selling their output for a future period. But the costs of rolling over positions will go up, as CME has raised the margin requirement for trading copper futures in a move to calm market volatility. Commodity traders including Trafigura and IXM, as well as Chinese producers, are among those caught in the short squeeze. They are looking to buy copper in the physical market to deliver against the CME contract. Major copper consumers have been approached to sell back their inventory, one such consumer told Reuters. CME copper has risen 27% so far this year, outpacing gains on the London Metal Exchange (LME) and creating an opportunity for traders to buy on the LME and sell on the CME. But moving metals from one exchange to the other would be hard, as half of the available copper in the LME system is of Russian origin and cannot be delivered into the CME. Benchmark copper CMCU3 on the LME was up 1.9% at $10,417 a ton, rising 22% so far this year. For other metals, aluminium stocks rose to their highest since October 2021 with a major delivery to warehouses monitored by the LME in Malaysia. MALSTX-TOTAL The increase is due to so-called "rent-deals" arranged between warehouses and traders. Aluminium CMAL3 last traded 0.4% lower at $2,589.5 a ton. Nickel CMNI3 rose 2.5% to $19,970, lead CMPB3 was also up 1% at $2,292, tin CMSN3 gained 1.2% to $33,800, while zinc CMZN3 lost 0.5% to $2,962. Limiting metals prices was also a stronger U.S. dollar .DXY . The greenback gained strength after higher import prices that point to inflation. A Federal Reserve official said they were not ready for an interest rate cut soon. (Reporting by Julian Luk in London; Editing by Kirsten Donovan and Chris Reese) (([email protected])) (( For related news and prices, click on the codes in brackets: LME price overview RING= COMEX copper futures 0#HG: All metals news MTL All commodities news C Foreign exchange rates FX= SPEED GUIDES LME/INDEX ))