Copper Hits New All-Time High as Stockpiles Remain ‘Trapped in the US’

London Metal Exchange Update: Copper Prices Reach New Heights

Copper prices have soared to unprecedented levels, surpassing $13,000 per ton for the first time, as market participants anticipate a tightening supply. The three-month contract in London climbed as much as 3.1% on Tuesday, reaching a record $13,387.50 per ton and exceeding the previous day’s high. Speculation that the Trump administration could impose tariffs on refined copper has led to increased stockpiling in the US, raising concerns about shortages elsewhere.

Li Xuezhi, head of research at Chaos Ternary Futures Co., noted, “Previously, inventories provided a cushion, but with supplies now concentrated in the US, that safety net has disappeared, forcing everyone to compete for what’s left.”

Strong Start for Base Metals in 2026

This year has seen a robust performance across base metals. The LMEX Index, which tracks six key metals including copper, has surged to its highest point since March 2022. Copper, essential for electrical wiring and infrastructure, has gained over 20% since late November. Aluminum prices have also reached their highest in more than three years.

Last year, President Donald Trump’s policies prompted a rush to ship copper into the US. Although refined copper was eventually exempted from tariffs, renewed discussions about potential levies have recently revived the trade, causing US copper prices to outpace global rates. December saw US copper imports hit their highest level since July.

Li emphasized, “The underlying reasons for this rally remain intact. It’s important to follow the market’s direction rather than focus solely on price points.”

Market Drivers: Policy and Demand

Expectations of US import restrictions, combined with strong demand from sectors like renewable energy, data centers, and power infrastructure, have fueled bullish sentiment. Kostas Bintas, head of metals at Mercuria Energy Group Ltd., warned that the surge in US imports could leave other regions short on copper, calling this rally a significant event for bullish investors.

Upcoming Decisions on Tariffs

The US Department of Commerce is set to provide an update on the domestic copper market by the end of June, after which a decision on refined copper tariffs is anticipated. Earlier proposals suggested a 15% tariff in 2027, increasing to 30% in 2028, though the White House has yet to confirm these plans.

US copper inventories have grown substantially, with Comex-monitored warehouses now holding over half a million short tons after 44 consecutive days of net inflows. Meanwhile, stocks in LME warehouses have nearly halved over the past year but remain above last June’s lows.

Signs of Tightening Supply

Other indicators from the LME suggest a tightening copper market. Spot prices are currently about $42 per ton higher than three-month futures, a backwardation that signals near-term supply constraints. On Comex, the discount for nearby futures compared to later contracts has widened recently.

Supply has also been impacted by disruptions at major mines and pressure on smelters to accept historically low processing fees, reflecting the struggle to secure enough raw material.

Geopolitical and Economic Factors

The rally in metals is partly driven by shifting global dynamics that could lead to more fragmented supply chains. Recent US actions, such as the capture of Venezuelan leader Nicolás Maduro, highlight efforts to secure access to critical resources. Additionally, a weaker US dollar has supported commodity prices.

Despite copper’s record-breaking run, Duncan Hobbs, head of research at Concord Resources Ltd., commented that the rally seems out of step with actual supply and demand fundamentals. He pointed to concerns over supply security and the impact of geopolitical events.

Goldman Sachs remains optimistic about copper’s outlook, citing limited supply growth and continued strong pricing. The bank noted that Chinese manufacturers have not seen a significant drop in orders despite higher prices.

Recent Market Performance

As of 4:05 p.m. in Shanghai, copper was trading 2.8% higher at $13,351.50 per ton, following a gain of over 4% the previous day. All major base metals advanced, with nickel and tin rising more than 5%.

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