London copper inventories have been falling for 42 straight days, and are now down to just 205,000 tons. The August contract’s premium to the September contract once widened to $370 per ton, while the spot premium to the three-month period reached $434—both the highest levels since the squeeze on supply that began in 2021.
Nearly half of the inventories have already been registered for withdrawal. Meanwhile, expectations of U.S. tariffs are also drawing copper inflows. China’s smelters are facing raw-material shortages and cutting output, leaving fewer and fewer spot cargos available for shorts to deliver. The LME has already launched emergency measures to prevent nearby-month contracts from running out of control.
This premium structure is something veteran traders understand: it’s not a sign of strong demand—it’s a physical squeeze. The surge in 2021 followed a similar playbook, and everyone knows how that one ended. The question now is: who on the other side is holding long positions and refusing to let go? When will delivery pressure finally blow up?
Copper’s story has never been simple, especially on an old-school exchange like the LME. Keep an eye on subsequent changes in warrants and delivery developments.
Nearly half of the inventories have already been registered for withdrawal. Meanwhile, expectations of U.S. tariffs are also drawing copper inflows. China’s smelters are facing raw-material shortages and cutting output, leaving fewer and fewer spot cargos available for shorts to deliver. The LME has already launched emergency measures to prevent nearby-month contracts from running out of control.
This premium structure is something veteran traders understand: it’s not a sign of strong demand—it’s a physical squeeze. The surge in 2021 followed a similar playbook, and everyone knows how that one ended. The question now is: who on the other side is holding long positions and refusing to let go? When will delivery pressure finally blow up?
Copper’s story has never been simple, especially on an old-school exchange like the LME. Keep an eye on subsequent changes in warrants and delivery developments.