U.S. Copper Imports Hit a 12-Year Record as LME Stocks Crash
U.S. importers hauled in more than 200,000 tonnes of refined copper in July, the biggest monthly volume in at least 12 years. Add that to what's already sitting in Comex warehouses, LME-registered stock and private port storage, and the country's copper stockpile is now pushing past 1 million tonnes, built almost entirely on the bet that Washington is about to tax refined imports. LME warehouse…
In July, the United States imported over 200,000 tonnes of refined copper, marking the largest monthly volume in at least 12 years, according to the source. Combined with existing stockpiles in Comex warehouses, LME-registered stock, and private port storage, the U.S. copper inventory now exceeds 1 million tonnes, driven largely by predictions of a future tax on refined imports.
However, LME warehouse stocks have plummeted for 42 consecutive sessions, reaching a 12-year low of just 204,975 tonnes, with nearly half of that stock earmarked for withdrawal.
Cash copper prices are trading at a $434-a-tonne premium to the three-month contract, the widest gap since the 2021 squeeze that prompted the exchange to intervene. Buyers are paying record prices near $14,500 a tonne as they scramble for immediate metal. The decision on refined copper duties by President Trump, a proposed 15% tariff starting in January 2027 that could rise to 30% in 2028, is influencing both the inflow and outflow of metal.
The Commerce Department was supposed to deliver its recommendation by June 30, but the deadline passed without a public ruling, leaving traders uncertain about the outcome. The COMEX-LME spread, typically used as a gauge of U.S. tariff expectations, is widening as a result of this uncertainty.
Societe Generale's anticipation of a 15% tariff landing on schedule is at just 14.6%, based on the current spread pricing, indicating that many of the recent imports may turn out to be unnecessary. Supply issues outside the U.S. are contributing to the shortage, with Congo's ban on copper concentrate exports forcing Chinese smelters to cut production, Antofagasta's Los Pelambres mine being shut down due to storms, and Codelco delaying its Andes Norte project to 2029. Freeport's Gresik smelter in Indonesia has been out of commission since August 8.
Despite these challenges, copper miners are benefiting from the chaos, with Ivanhoe Mines up about 15% this month and First Quantum gaining 12%. Antofagasta, however, has slipped roughly 3% following a reduction in production guidance. The current situation has been described as an "economically trapped" state, with copper stockpiled in U.S. warehouses due to tariff politics while the rest of the world faces shortages.
If the tariff is confirmed, expect another surge in buying into Comex, potentially leading to further pain in London. Conversely, delaying or weakening the tariff could result in a sudden drain of the U.S. hoard back onto the global market, causing the rally to lose momentum. Ultimately, the copper isn't where the world needs it; it's where the politics have placed it. The source of this report is Michael Kern for Oilprice.com.
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