LME copper stockpiles have fallen for 42 consecutive days, marking the longest continuous decline since 2014. This rapid drain on inventories has triggered a major supply squeeze, driving copper prices close to record-high levels. [1]
📉 Why are Copper Stockpiles Disappearing?
A few major global market shifts are driving this massive warehouse drain:
The Tariff Rush: Traders and producers are aggressively shipping copper out of London Metal Exchange (LME) warehouses and into the United States. This rush is triggered by market anticipation that the U.S. government could place new import tariffs on refined metal. [1, 2]
Pre-Earmarked Withdrawals: While total copper remaining in the LME warehouse network sits at roughly 204,975 tonnes, nearly half of that metal is already locked in and earmarked for physical delivery. This leaves very little actual copper available on the open market for new buyers. [1, 2]
Shift in Chinese Supply: The share of available Chinese-origin copper in LME warehouses plunged from 59% down to just 42%. [1]
💥 Market Impact: The Bidding War
When stockpiles drop this low, it triggers a high-stakes reaction in the financial markets:
A Short Squeeze: Traders holding "short" positions (bets that the price will drop) are now in a dangerous spot. Because there is very little physical copper left to buy, they are being forced into a aggressive bidding war to purchase whatever metal is left to cover their trades. [1]
Price Spikes: Spot copper prices (the price for metal delivered right now) have jumped significantly higher than prices for future delivery dates. This condition is called backwardation, and it indicates a severe, immediate shortage. The premium for immediate copper reached its widest level since 2021, forcing the LME to step in with emergency measures to cool down the market.
[1]
According to reports tracked on MINING.COM, New York Comex copper futures are hovering around $6.59 a pound (roughly $14,500 a tonne), keeping the metal within striking distance of all-time highs. [1]
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