Copper prices are approaching record highs, with three-month copper on the London Metal Exchange (LME) reaching as high as $14,343 per metric ton, just shy of the $14,527.50 record. This surge is primarily attributed to a market squeeze, particularly outside the U.S., rather than a global deficit, as traders are incentivized to ship metal into COMEX warehouses ahead of potential U.S. tariffs. This has led to a significant increase in COMEX inventories, which have risen for 46 consecutive days to a record 675,185 metric tons, while drawing down stocks in other regions.
The prospect of a 15% U.S. tariff on refined copper from January 1, 2027, potentially rising to 30% from 2028, is reshaping the global copper market. Analysts suggest this tariff threat has transformed what was anticipated to be a surplus market into a balanced or even deficit-like scenario, assuming the stockpiled copper in the U.S. becomes unavailable to the global market. U.S. imports of refined copper cathodes increased by 3% in the first half of 2026 compared to the previous year, reaching almost 885,000 tons, and more than double the imports in the first six months of 2024.
Despite recent large inflows of metal into LME warehouses, which temporarily eased some pressure, underlying physical tightness persists. Orders to withdraw 65,400 tons of copper from LME warehouses recently underscore continued demand outside the U.S. Experts, such as Robert Edwards of CRU, predict that if U.S. imports continue at their current pace, the market will effectively appear to be in a deficit. Macquarie strategist Alice Fox notes that while there are significant copper stocks in COMEX, prices would "massively spike" if the tariffs proceed, though Glencore's CEO, Gary Nagle, believes clarity on tariffs, regardless of the outcome, could lead to price falls.
The global market continues to face supply constraints, with low stocks, mine disruptions, and an outage at the Gresik smelter in Indonesia contributing to the tightness. This situation, combined with strong domestic demand in China, which limits its capacity to offset shortages elsewhere, could push copper prices to new record highs in the coming weeks or months, according to Amelia Fu of Bank of China International.
