U.S. copper stockpile growth slows as tariff-driven trade incentive fades

Traders Union
All News
Financial News
US copper stockpile slows

Highlights

Comex copper prices reached a record $6.83 a pound on September 22, but the US-LME arbitrage shrank from above $3,000 to $310 a ton, sharply reducing trade incentives.
US copper inventories, both on and off exchange, surged to about 1.6 million tons, with Comex stocks alone up nearly 750% since February last year at over 714,000 tons.
The US imported over 1.62 million tons of copper last year, up 80% from 2024, creating a domestic surplus and contributing to tighter supply and higher prices in other global markets.

Stockpile build-up and tariff timeline

As reported by Reuters, traders have been redirecting copper to the U.S. since Trump ordered a study in February last year into possible import tariffs, creating a price gap that made deliveries into Comex-approved warehouses profitable. Comex prices later climbed to a record $6.83 a pound, or $15,057 a ton, on September 22, while the premium over London Metal Exchange prices widened enough to cover freight and insurance costs.

That arbitrage peaked above $3,000 a ton in July last year, but has since narrowed to about $310 a ton. Analysts say the reduced spread is lowering the incentive to keep shipping metal into the U.S., even though traders still await a decision on whether refined copper imports will face a 15% tariff from January 1, 2027, rising to 30% in 2028.

The U.S. Commerce Department was due to deliver its report on the domestic copper market by June 30, but no decision has been announced. Macquarie analyst Alice Fox says one likely outcome is that the January deadline passes without a ruling, which would leave the tariff question unresolved and keep enough of a premium in place to retain copper already in the U.S., without attracting much more metal.

Market distortions and impact on global supply

Visible copper inventories in the U.S. have expanded sharply, with Comex-approved warehouses now holding roughly 70% of global visible stocks. Macquarie estimates total U.S. copper inventories, on and off exchange, at about 1.6 million tons, while Comex stocks alone have risen nearly 750% since the end of February last year to more than 714,000 tons.

Additional inventories have also built up in LME warehouses in New Orleans and Baltimore, where stocks have increased 44% since mid-August to nearly 130,000 tons. Combined stocks across Comex, the Shanghai Futures Exchange and the LME total more than 1 million tons, underscoring how much metal has been pulled into the U.S. market.

Analysts say the stockpile now exceeds domestic needs. Trade Data Monitor figures show the U.S. imported more than 1.62 million tons of copper last year, up 80% from 2024, while the U.S. Geological Survey estimated domestic production at 1 million tons last year, leaving a surplus that analysts expect to persist this year.

That imbalance has contributed to shortages outside the U.S. and stronger prices abroad, despite an overall global surplus. Analysts say excess U.S. metal is unlikely to flow back out unless prices on the LME and the Shanghai Futures Exchange move significantly above Comex levels, which would probably happen only if shortages outside the U.S. become severe.

Our earlier article on U.S. companies exploring Malaysia’s rare earth sector described Washington’s push to build alternative critical-mineral supply chains outside China. It covered potential investments in Malaysian mining and processing capacity, supported by a bilateral critical minerals agreement aimed at strengthening secure sourcing for strategic industries.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.