The United States experienced a record influx of copper in July, with approximately 200,000 metric tons unloaded on US territory. This marks the largest single-month import volume since IHS Markit began recording maritime statistics in 2014. A significant portion, about 110,860 tons, was temporarily stored in port warehouses outside the London Metal Exchange (LME) warrant system, indicating a strategic build-up of inventories.
This surge is largely driven by the persistent and wide spread between New York's Comex and London's LME. In July, the average gap between the Comex front-month contract and the LME cash value exceeded $350 per metric ton. This arbitrage opportunity has encouraged the redirection of commercial copper flows towards the US. As a result, official inventories at Comex-registered warehouses have increased by over 40% year-to-date, reaching record highs. Total copper reserves within the US, encompassing both official and private warehouses, are estimated to have surpassed 1 million metric tons.
The unprecedented stockpiling in North America has led to a reduction in supply elsewhere. LME warehouse inventories outside the US have sharply declined this year, as traders diverted cargoes from Europe and Asia to capitalize on higher prices in North America. This has created tightness in the London market, with the LME cash and short-dated contracts trading at a premium of around $65 per ton over the three-month futures contract, representing the steepest backwardation structure since January.
The primary catalyst for this activity is the ongoing uncertainty surrounding potential US tariffs on refined copper. While a 50% tariff already applies to semi-finished copper products, the White House has repeatedly flagged the possibility of phased tariffs on refined copper, with discussions centered on a 15% rate starting in 2027, rising to 30% in 2028. Although a formal decision was deferred past a June 2026 review, the threat of tariffs continues to encourage accelerated shipments into the US. Mining.com reports that proponents argue tariffs would stimulate domestic mining and refining investment, while opponents warn of increased costs for local manufacturers.
Market participants anticipate two main outcomes. If Washington formally imposes tariffs on refined metal, a final rush of shipments will occur before the tariffs take effect. Conversely, if the proposal is officially rejected, traders are expected to unwind accumulated positions, and export flows will quickly reverse towards Asia and Europe. This strategic accumulation of copper is also influenced by its status as a critical input for the energy transition, power grids, artificial intelligence (AI) infrastructure, electric vehicles, and the defense industry.
