Copper Prices Soar as London and Shanghai Stockpiles Plummet

Copper prices have been boosted by dwindling stockpiles in London and Shanghai. The available copper in LME warehouses has fallen to 255,400 tons, the lowest since February, while ShFE stocks slipped below 70,000 tons.

This reduction in inventories is causing a shift from macro trading to supply-and-demand dynamics, according to StoneX, a commodities brokerage. As a result, cash copper is now trading $25 a ton above the three-month contract on the LME, indicating a premium for immediate delivery.

The situation is made more complex by the disparity between US and non-US markets. US Comex inventories sit at a record 644,465 tons, while metal flows stateside ahead of possible import tariffs are leaving non-US markets tighter. This can lead to price gaps between US and non-US benchmarks widening.

The effects on market dynamics and trading strategies will be significant. The LME curve is steepening, which can support spot and nearby prices until inventories rebuild. However, this also changes the math for anyone exposed through rolling futures, as the 'roll' between expiring and new contracts can become a bigger cost or benefit depending on the curve.