The three-month contract on the London Metal Exchange traded near $13,950 a tonne, extending a rally driven by shrinking freely available inventories, strong import demand from China and uncertainty over possible US tariffs on refined metal. Copper futures in the United States also advanced towards $6.60 a pound.
Traders have diverted large quantities of copper to American warehouses to take advantage of higher US prices and prepare for potential import duties. The movement has left the United States holding more than half of the copper stocks visible across the world’s main exchanges, creating an unusual imbalance between regional markets.
US inventories expanded sharply during the first half of the year. Stocks monitored by the Comex exchange exceeded 650,000 tonnes in June, several times their level at the start of the import rush. The accumulation has come partly at the expense of London and Shanghai, where buyers face fewer readily available units.
The trade reflects expectations that President Donald Trump could impose tariffs on refined copper after receiving a review of domestic production, refining capacity and import dependence from the Commerce Department. The administration has not announced a final decision on the proposed duties, leaving traders exposed to a potentially abrupt shift in prices and shipping patterns.
A presidential proclamation issued last year imposed a 50 per cent tariff on semi-finished copper products and copper-intensive derivatives but excluded refined copper. It also directed officials to assess whether a phased tariff of 15 per cent should apply to refined imports from January 2027, rising to 30 per cent in 2028.
That prospect has encouraged merchants to move metal into the United States before any duties take effect. Higher Comex prices have provided an additional incentive, although the gap with London has fluctuated as investors reassessed the probability, timing and scope of fresh trade restrictions.
The resulting stock concentration has tightened the physical market outside the United States. Exchange data show American warehouses account for about 58 per cent of globally visible copper inventories, a level that has raised concerns over whether regional dislocations could become a longer-term feature of the market.
Chinese demand has added pressure. Imports of refined copper reached a nine-month high in June as maintenance at domestic smelters reduced output. Stocks held by the Shanghai Futures Exchange have fallen by more than 80 per cent from their mid-March peak, while premiums paid for imported copper have risen sharply.
The Yangshan premium, which measures the amount buyers are prepared to pay above international prices for metal delivered into China, climbed to its highest level in more than a year. Rising premiums generally indicate stronger physical demand and reduced availability at ports and bonded warehouses.
China’s copper industry is also contending with limited supplies of concentrate and scrap. Treatment charges paid to smelters have remained under intense pressure because mining output has failed to keep pace with processing capacity. Lower charges squeeze smelter margins and can eventually lead plants to reduce production or extend maintenance closures.
Supply disruptions have reinforced the bullish tone. Mines in several producing countries have faced operational setbacks, while shortages of sulphuric acid earlier in the year affected some leaching operations. Labour disputes, declining ore grades and delays to new projects have also limited the industry’s ability to respond rapidly to higher prices.
Copper previously surged to a record $14,527.50 a tonne in January during a speculative rally that triggered short-covering and sharp intraday volatility. Prices later retreated as investors questioned whether consumption could support the move and as concerns over global economic growth resurfaced.
The metal has nevertheless gained more than 50 per cent from a year earlier. Demand expectations remain supported by investment in power grids, electric vehicles, renewable energy systems, data centres and artificial intelligence infrastructure, all of which require substantial volumes of copper wiring and electrical equipment.
The current rally differs from the January spike because physical market indicators have strengthened alongside investor buying. Falling stocks in Asia, shipments towards the United States and tighter availability on the London exchange have increased the cost of securing prompt metal.
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