Contango occurs in a market when futures prices for a commodity are greater than the current spot price. Backwardation happens in a market when the price of futures contract is below the spot price of the same commodity.
The reasons for Contango and Backwardation are mostly supply and demand. For example:
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If copper is currently abundant and has uninterrupted supply, it might follow Contango because the current spot price will be lesser due to high supply.
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If copper is currently scarce and little supply, it might follow backwardation because the current spot price will be higher due to less supply.
