Copper advanced to the highest in two months, reaching $14,000 a ton in London, as traders monitored ballooning volumes held in the US ahead of an expected decision on an import tariff by President Donald Trump.
Futures headed for a second daily gain on the London Metal Exchange, building on an increase of more than 3% last month. More than 200,000 tons of copper arrived at US ports in July, the largest monthly volume in IHS Markit shipping data dating back to 2014. That’s added to a huge hoard in American warehouses and ports, and sapped availability for buyers elsewhere in the world.
The US influx has gathered pace despite uncertainty over plans for a tariff on refined copper. The Commerce Department was scheduled to deliver a recommendation by June 30, but a decision has yet to be announced. US prices remain at a premium to those on the LME, keeping the trade profitable.
Inventories at the LME’s warehousing network also dropped to a five-month low, with traders citing shipments to China to relieve a copper shortage. Chinese fabricators have been buying hand-to-mouth this year, keeping inventories low.
Copper has rallied about 12% this year after reaching a record high in January. Its performance has been aided by speculation about US trade policy, as well as deep-seated enthusiasm about prospects for global demand driven by the energy transition and the build-out of artificial intelligence infrastructure. At the same time, new mines are getting harder to find and more expensive to develop.
In the latest sign that the LME market is tightening, prices moved to a steeper backwardation, a structure that points to a squeeze on short-term supplies. Nearby contracts traded at a premium of $99.50 a ton over three-month futures, up from about $30 a week ago and the widest since January.
Copper rose 0.9% to $13,999 a ton at 10:08 a.m. in London, as all of the other five main LME metals also gained. Zinc advanced 0.3% from its highest close since 2022, while aluminum rose to its highest since mid-June.
