Copper Tug-of-War: US and China Engage in Global Metal Heist
The global copper market is experiencing a significant shift as two of the world's largest economies, the US and China, engage in a tug-of-war over the metal. According to data from the Shanghai Futures Exchange, stockpiles have plummeted by 82% since early May, reaching a low of approximately 69,000 tonnes by late July - their lowest level in about two and a half years.
On the other side of the Pacific, COMEX inventories in the US have surged past 650,000 tonnes, a record, rising more than 40% year-to-date. This surge is largely driven by US buyers stockpiling copper ahead of potential tariffs on refined imports, creating a dynamic where American importers are pulling metal westward while Chinese buyers scramble to secure what's left elsewhere.
The London Metal Exchange has also seen its stocks drop by 28% over the same period, further exacerbating the global supply shortage. The Yangshan import premium in China hit $103 per tonne during mid-July, while COMEX copper traded near $6.55 per pound and LME hovered around $13,850 per tonne.
The demand for copper is being driven by China's infrastructure buildouts, electrification efforts, and power grid upgrades. The US side of the equation, however, is more defensive - anticipation of tariffs on refined imports has turned COMEX warehouses into strategic reserves, with buyers hoarding metal before the cost of importing goes up.
Major production disruptions have hit operations in Chile and Indonesia, two of the world's most important copper-producing nations. The Democratic Republic of Congo has added another layer of complexity by banning copper concentrate exports, further tightening an already constrained picture.