The biggest trading volume in copper call options on record signals supply troubles brewing in the market.

A spread trade worth $6.5 million was posted just after 7 a.m. on Comex in New York in a bet that the price of the metal used in wires and pipes will surge past $3.05 in a few months, from Monday’s settlement price of $2.909.

Copper production will trail consumption by 116,000 metric tons this year, a second straight deficit, Citigroup Inc. analysts said in a report in December. While orders to withdraw the metal from warehouses tracked by the London Metal Exchange fell by the most on record on Monday, inventories are still down 43 percent in the past year. The restart of Codelco’s two smelters have been delayed to April, adding to supply woes.

Copper bet comes as LME stocks sit just below 5-month high

“It’s a pretty aggressive bullish bet,” Tai Wong, head of base and precious metals derivatives trading at BMO Capital Markets, said in an email. The wager was likely fueled by “expectation that supply will become tight.”

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Resource Commodities

Name Last Change
Gold 1333.98 0.36%
Silver 14.80 0.20%
Copper 2.63 2.630
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Natural Gas 2.39 2.60%
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Zinc 1.09 0.00%