The United States has amassed its largest copper stockpile in decades, a phenomenon that is significantly distorting global copper flows and tightening the perceived market supply. This influx has been driven by Washington's policy to onshore the copper supply chain and by traders front-loading material to avoid potential tariffs, resulting in record imports.
In July 2026, the US imported an unprecedented 225,094 tonnes of refined copper and copper alloys, marking a 78% increase from the previous month and an 8% rise year-over-year. This surge occurred despite the US already sourcing about half its copper needs from abroad, with refined imports growing sixteen-fold since 2015 while domestic output has declined.
This accumulation of copper in the US has led to an artificial market tightness. Of the 994,000 tonnes of global visible copper inventory, 800,000 tonnes are currently held in the US. Benchmark, a copper analyst, assessed that this stockpiling made the market "feel" 700,000 tonnes tighter in 2025 than the actual surplus, with a similar impact expected in 2026. This perceived tightness, along with factors like AI bullishness and long-term supply fears, has driven copper prices to new highs, approaching $15,000 per tonne by September 2026.
A critical bottleneck in the US copper supply chain is smelting capacity, with only two primary smelters operating domestically. This means that new mine production, such as Rio Tinto's Resolution Copper project which could meet over 25% of US demand, might still need to ship concentrate abroad for processing due to weak domestic smelting economics. The current policy encourages large refined copper imports while potentially allowing domestically mined concentrate to be exported, creating inefficient two-way trade flows rather than a shortened supply chain.
The future of the copper market hinges on US tariff policies. If a policy change leads to a reduction in cathode flows to the US, the material currently creating an artificial deficit could re-enter the global market, potentially making it artificially looser. Despite hawkish signals from the Federal Reserve regarding interest rate hikes, copper prices have remained resilient, with Chinese demand showing signs of a rebound, contributing to a weekly gain for the metal.
