Copper Squeeze Drives Prices Near Record High

Copper prices are surging on the London Metal Exchange, nearing a record high as supply constraints tighten. The metal's spot price has traded as much as $545 a metric ton above the three-month futures contract, the widest backwardation since 2021.

This squeeze is being fueled by a surge in shipments to the US in anticipation of potential import tariffs, while recent tightness in China has drawn cargoes there. As a result, stockpiles across the LME's global warehousing network have shrunk by almost half since mid-May.

Ewa Manthey, a commodities strategist at ING Groep NV, notes that the elevated premium for near-term delivery of copper 'points to continued scarcity of available metal.' She expects these supply constraints to support the market in the near term, particularly if demand remains resilient.