US copper cathode imports to slow in November as October beats breakbulk record

US copper cathode imports are expected to slow in November compared to a record-breaking October, according to Kpler. While October deliveries of copper cathode in breakbulk are projected to exceed 230kt, November deliveries are anticipated to be around 100kt. This decline is expected due to the closing of the LME–COMEX arbitrage, a factor that previously spurred the surge in imports.

The pending Section 232 tariff verdict will determine the future of US copper imports and the fate of the estimated 2 million tons of cathode already on US shores. The arbitrage between LME and COMEX copper prices, which averaged $500/t between May and early August, has since narrowed, leading to reduced cathode loadings for US delivery.

The primary source of breakbulk cathode deliveries has been Chile, with significant contributions also coming from the DRC and Zambia. However, recent cargoes from Tanzania have decreased significantly. The outcome of the Section 232 investigation into a potential tariff on copper imports remains uncertain, which could impact the arbitrage dynamics and potential import push.

Meanwhile, China's copper imports from Chile have fallen, and the country is facing a shortage of seaborne imports of copper concentrate due to reduced volume and restrictions. With Chinese imports down 11% year-to-date and restrictions affecting scrap availability, the Chinese market is in short supply. The Yangshan premium for copper has hit a record high, and Chinese cathode imports have averaged 326kt per month in Q4 over the last five years, reflecting a stronger demand during the final months of the year.