Copper nears $14,000 as record US imports drain global supply

Copper climbed to its highest level in two months on the London Metal Exchange, approaching $14,000 a ton on Monday, as a record wave of imports into the United States drained supply from the rest of the world ahead of President Donald Trump's pending decision on refined copper tariffs.

Record Inflows Reshape Global Inventories

More than 200,000 metric tons of copper arrived at US ports in July, the largest single-month inflow in IHS Markit shipping data going back to 2014, according to Bloomberg. The surge has pushed combined US stockpiles — across Comex CME Group Inc. ↗ 0.82% registered warehouses and off-warrant storage — to well above one million metric tons, with official Comex inventories climbing more than 40% this year to record highs.news.futunn+3

The buildup has come at the direct expense of supply elsewhere. LME warehouse stocks outside the United States have fallen sharply this year as traders redirect metal to American ports to capture higher prices. Available LME copper inventory dropped to 94,200 tons after another 7,225 tons were queued for withdrawal, according to exchange data cited by Reuters. The cash-to-three-month spread widened to a $105-per-ton premium — the steepest backwardation since January — signaling acute near-term tightness in the London market.bloomberg+1

Tariff Arbitrage Drives the Rush

The Comex-LME arbitrage spread averaged more than $350 per metric ton in July, a margin large enough to cover transoceanic shipping costs and attract sustained flows of overseas metal. The trade has accelerated even though the June 30 deadline for Commerce Secretary Howard Lutnick to submit tariff recommendations passed without an announcement from the White House.mishtalk+3

"Tariff-driven arbitrage is dominating the market — even more so than actual demand growth," said Michael Cuoco, head of metals at StoneX Financial. "Those who believe they're closer to the core decision-makers are convinced that getting copper into the US today is far wiser than waiting until tomorrow."news.futunn

The administration is weighing whether to extend tariff protections — already at 50% on semi-finished copper products — to refined copper cathodes and anodes. Trump directed Lutnick last July to study phased tariffs starting at 15% from January 2027.finance.biggo+1

What Comes Next

Market participants remain divided on the outcome. Proponents argue tariffs would encourage domestic mining investment in a metal deemed strategic for power grids, artificial intelligence, electric vehicles, and defense. Opponents warn higher input costs would erode US manufacturing competitiveness. Chinese brokerage Jinrui Futures noted that demand from some copper buyers in China has already weakened in the face of elevated prices.moneyweb+1

If tariffs are ultimately imposed, analysts expect a final concentrated wave of shipments before the effective date. If the proposal is shelved, the positions accumulated over the past 18 months could unwind, potentially reversing trade flows.finance.biggo+1