Key facts
- U.S. refined copper imports in July exceeded 200,000 tonnes, the highest volume in at least 12 years.
- Total U.S. copper stockpile is now over 1 million tonnes, largely due to anticipated tariffs.
- LME registered warehouse stocks have fallen for 42 consecutive sessions, reaching their lowest point since 2014.
- A proposed 15% tariff on refined copper imports, potentially starting in January 2027, is influencing U.S. import levels.
- Global supply constraints, including export bans and mine disruptions, are contributing to tight physical markets outside the U.S.
U.S. importers have significantly increased refined copper intake, with July volumes reaching a 12-year high of over 200,000 tonnes. This surge has contributed to a domestic stockpile exceeding 1 million tonnes, primarily driven by anticipation of potential U.S. tariffs on refined copper imports. The proposed tariffs, a 15% duty starting in January 2027 and rising to 30% in 2028, are a key factor influencing this market dynamic.
Simultaneously, global copper supplies are tightening. London Metal Exchange (LME) registered warehouse stocks have experienced their longest decline streak since 2014, falling for 42 consecutive sessions to just over 204,975 tonnes, with a substantial portion already earmarked for withdrawal. This scarcity has led to a wide premium for cash copper over the three-month contract, the largest since 2021, driving prompt metal prices to record highs near $14,500 per tonne.
Several factors are contributing to the global supply squeeze outside the U.S. Congo's ban on copper concentrate exports is forcing Chinese smelters to reduce operations. Disruptions at mines like Antofagasta's Los Pelambres due to storms, Codelco's delay of its Andes Norte project to 2029, and ongoing issues at Freeport's Gresik smelter in Indonesia mean that new supply is unlikely to replenish LME shelves soon. Chile's national output remains stagnant.
Traders are closely watching for a decision from the Commerce Department regarding the proposed tariffs, a deadline for which has already passed. While Societe Generale estimates only a 14.6% chance of the tariff being implemented as scheduled, the market positioning suggests significant hedging activity. The COMEX-LME spread is increasingly seen as a barometer for U.S. tariff expectations, with a wider premium continuing to draw metal into the United States.