U.S. importers brought in more than 200,000 tonnes of refined copper in July, the largest monthly volume in twelve years, pushing the country's stockpile past one million tonnes. The buying spree is a bet that Washington will soon tax refined imports, and it's draining warehouses everywhere else: LME stocks have fallen for 42 straight sessions to a five-year low.
U.S. importers hauled in more than 200,000 tonnes of refined copper in July, the biggest monthly volume in at least twelve years. Combined with what's already sitting in Comex warehouses, LME-registered stock, and private port storage, the country's copper stockpile is now pushing past one million tonnes, built almost entirely on the bet that Washington is about to tax refined imports.
LME stocks fall for 42 straight sessions
LME warehouse stocks have fallen for 42 straight sessions, the longest losing streak since 2014. They're now down to just 204,975 tonnes, with nearly half of that already marked for withdrawal.
As a result, cash copper is trading at a $434-a-tonne premium to the three-month contract, the widest backwardation since the 2021 squeeze that forced the exchange to intervene. Buyers scrambling for prompt metal are paying record prices near $14,500 a tonne.
Tariff uncertainty is driving the rush
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 out of everyone else's. The Commerce Department was supposed to deliver its recommendation by June 30, but that deadline passed without a public ruling, so traders remain positioned for either outcome.
According to ING: "The COMEX-LME spread has increasingly become a gauge of U.S. tariff expectations", strategist Ewa Manthey told CNBC, adding that a wider premium keeps pulling metal into the country. However, Societe Generale puts the odds of that tariff actually landing on schedule at just 14.6%, a bet that most of this rush turns out to be for nothing.
Supply losses outside the U.S. compound the squeeze
The squeeze outside the U.S. isn't only about tariff hedging. Congo's ban on copper concentrate exports has Chinese smelters cutting runs, while storms knocked Antofagasta's Los Pelambres offline and Codelco pushed its Andes Norte project back to 2029.
Chile's national output remains stuck near 5.5 million tonnes, and 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%. Antofagasta, meanwhile, has slipped roughly 3% since trimming its production guidance.
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.
Source: Oilprice.com
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