Copper Prices Surge Amid LME Supply Concerns

Copper prices have hit their highest level in over six months due to supply concerns on the London Metal Exchange (LME). Inventories on the LME have fallen to their lowest since February, with less than 210,000 tons in storage. Traders shifted copper to the United States ahead of possible tariffs on refined-metal imports, leaving only half of the original amount.

The market is expecting a record-high import for July, according to Benchmark Mineral Intelligence analyst Albert Mackenzie. He noted that although official data has not been published yet, high imports have been seen throughout the year.

Rising premiums for near-term copper contracts over longer-dated futures are expected to attract metal back to LME warehouses. The premium for cash copper over the three-month contract closed at $416.29 on Friday, its highest since November 2021. The LME cash copper contract reached a record high of $14,830 a ton on Monday.

Copper deliveries to LME warehouses totaled 3,700 tons on Friday, while outflows were only 850 tons. This suggests that more metal is being stored in the LME system. In contrast, copper stocks in Comex-registered warehouses have climbed nearly 700% since U.S. President Donald Trump proposed import tariffs in February last year.

The Yangshan premium, a measure of China's demand for imported copper, has declined to $90 a ton from $115 on July 22 but remains 350% higher than in January. The weaker US dollar is also supporting industrial metals, making them cheaper for buyers using other currencies.