Copper Squeeze Deepens as LME Stockpiles Plummet

A severe copper shortage is gripping the market as stockpiles dwindle on the London Metal Exchange (LME). Buyers are paying record premiums to secure immediate supply, with spot copper surging above September contracts and pushing the one-month spread to over $300 per tonne.

This squeeze is driven by declining LME copper inventories, which have fallen for 42 consecutive trading days, a level not seen since 2014. With only around 205,000 tonnes of copper remaining in the LME warehouse system, and nearly half earmarked for withdrawal, traders are scrambling to secure metal.

The shortage is also being driven by Chinese demand and supply disruptions globally, which have pushed the LME benchmark three-month contract above $14,100 a tonne. This has led to a copper bidding war, with prices in the US surging as traders bet on potential tariffs. The Trump administration's proposed 15% tariff on refined copper imports could be introduced by 2027, analysts estimate.

As supply deficits loom for 2027 and beyond, experts warn that new mines will need to come online to meet rising global consumption. Canada is being touted as a potential hub, with its established mining industry and stable regulatory framework, but even here, challenges remain in developing copper resources outside traditional producing regions.