U.S. importers hauled in more than 200,000 tonnes of refined copper in July, the biggest monthly volume in at least 12 years. Add that to what’s already sitting in Comex warehouses, LME-registered stock and private port storage, and the country’s copper stockpile is now pushing past 1 million tonnes, built almost entirely on the bet that Washington is about to tax refined imports.
LME warehouse stocks, however, have fallen for 42 straight sessions, the longest losing streak since 2014, down to just 204,975 tonnes, with nearly half of that already marked for withdrawal.
Cash copper is trading at a $434-a-tonne premium to the three-month contract, the widest gap since the 2021 squeeze that forced the exchange to intervene, and buyers scrambling for prompt metal are paying record prices near $14,500 a tonne.
President Trump’s decision on refined copper duties, a proposed 15% tariff starting January 2027 that steps up to 30% in 2028, is pulling metal into U.S. warehouses and pulling it out of everyone else’s.
The Commerce Department was supposed to deliver its recommendation by June 30. That deadline passed without a public ruling, and traders are still positioned for either outcome.
“The COMEX-LME spread has increasingly become a gauge of U.S. tariff expectations,” ING commodities strategist Ewa Manthey told CNBC, adding that a wider premium keeps pulling metal into the country.
Societe Generale puts the odds of that 15% tariff actually landing on schedule at just 14.6%, based on how the spread is currently priced, a bet that most of this rush turns out to be for nothing.
The squeeze outside the U.S. isn’t only about tariff hedging.
Congo’s ban on copper concentrate exports has Chinese smelters cutting runs. Storms knocked Antofagasta’s Los Pelambres offline, Codelco just pushed its Andes Norte project back to 2029, and Chile’s national output remains stuck near 5.5 million tonnes. Freeport’s Gresik smelter in Indonesia has been down since August 8. None of that supply is coming to refill LME shelves anytime soon.
Copper miners are riding the chaos higher regardless. Ivanhoe Mines has gained about 15% this month and First Quantum 12%, while Antofagasta has slipped roughly 3% since trimming its production guidance.
We flagged this exact split months ago, warning that copper piling up in U.S. warehouses because of tariff politics was becoming an “economically trapped” tonne while the rest of the world quietly ran short.
That trap now looks more like a fault line…
Confirm the tariff and expect another wave of buying into Comex, with more pain in London. Delay it, or water it down, and the stateside hoard could start draining back onto the global market fast enough to knock the rally off its feet.
Either way, the metal isn’t sitting where the world needs it. It’s sitting where the politics put it. By Michael Kern for Oilprice.com
