Copper Prices Surge Above $14,000/t Amid Supply Squeeze

Copper prices have surged to near-record levels, trading above $14,000/t on the London Metal Exchange (LME), as nearby market conditions tighten.

The LME three-month copper price has climbed above $14,000/t, driven less by broad-based sentiment and more by tightening conditions in the nearby segment of the market, according to analysts Ewa Manthey and Warren Patterson at ING.

The tom-next spread on the LME copper market surged to a premium of $75/t yesterday, its widest level since January, as the supply squeeze intensified ahead of potential import tariffs. Meanwhile, the cash/3m copper spread traded at a premium of $545/t yesterday, highlighting tightness in spot supplies.

The analysts attribute much of the current tension in the market to shifting physical flows and constrained warehouse stocks. Shipments into the US ahead of a potential refined copper import tariff, together with ongoing Chinese buying, have depleted inventories held in the LME warehouse network and tightened prompt supply.