Copper Stockpiles Surge as LME Inflows Defuse Supply Tightness

London Metal Exchange (LME) copper stockpiles have seen a significant surge in recent days, rising by over 63,000 metric tons from August 17 to 19. This increase has helped alleviate concerns about a severe supply crunch and narrowed the backwardation between nearby and deferred contracts.

According to Benchmark Mineral Intelligence, the expansion of warrant-backed copper inventories was accompanied by additions in Asia, the United States, and Europe. LME holdings as a whole advanced by 28,000 tons due to material entering exchange warehouses and previously voided warrants being reinstated.

Benchmark copper analyst Albert Mackenzie noted that these inflows have tempered concerns about acute near-term scarcity, stating, 'The surge demonstrates how elevated costs for prompt metal can swiftly attract supply back to the exchange.'

The market mechanics behind this sudden influx of copper are attributed to US tariff unpredictability, which has redirected global trade towards the US and created regional disparities. This has led to perceptions of shortages in other regions.