The article explores how metal futures markets work under different conditions. When the market is in contango (prices expected to rise), futures prices tend to overestimate future spot prices. In contrast, in backwardation (prices expected to fall), futures prices underestimate future spot prices. Price volatility is higher in backwardation markets, especially when inventory levels are low. Spot prices are generally more volatile than futures prices, especially when inventory levels are low. Trading volume has a stronger impact on futures price volatility in backwardation markets.