LME Copper Inventories Surge 50% Amid US Tariff Uncertainty

Copper inventories on the London Metal Exchange have surged by more than 50% in just three days, with on-warrant stocks increasing by 63,000 tonnes across Asia, the US, and Europe. This sharp rise has eased a steep cash-to-three-month backwardation that had reached nearly $550 per tonne.

The cash-to-three-month spread has compressed from $436 to about $176 per tonne, while three-month copper has slipped to $13,885 per tonne, down almost $300 since Monday. Benchmark's Albert Mackenzie links the volatility to US tariff uncertainty, which is pulling large copper volumes into the US and creating regional supply distortions.

Total LME stocks increased by only 28,000 tonnes, indicating substantial re-warranting of previously cancelled metal. This indicates that physical holders have been incentivized to deliver into LME warehouses due to carry trade opportunities created by the backwardation levels.