Copper Surges To Fresh Record As Inventories ‘Locked In The US’
Three-month futures surged as much as 3.1% to a record $13,387.50 a ton in London on Tuesday, surpassing a peak set on Monday.
Copper extended a powerful rally after bursting through $13,000 a ton for the first time, as investors bet on a tighter market and a risk-on mood took hold in broader financial markets.
Three-month futures surged as much as 3.1% to a record $13,387.50 a ton in London on Tuesday, surpassing a peak set on Monday. Expectations that the Trump administration may introduce a tariff on refined metal have drawn huge volumes of inventory into the US, potentially leaving the rest of the world short as miners struggle to boost output.
“Inventories used to act as a buffer, but now they’re locked in the US,” Li Xuezhi, head of research at Chaos Ternary Futures Co., said by phone. “So the buffer is gone and everyone will have to scramble.”
Base metals have seen a very strong start to 2026, with the LMEX Index that tracks the main six including copper surging to the highest level since March 2022, when the sector peaked. The red metal — used in wires and cables — has now racked up a gain of more than 20% since late November, while aluminum has rallied to the highest level in more than three years
President Donald Trump fueled a rush to ship copper to the US in the first half of last year, before choosing to exempt refined metal from tariffs, prompting a pause. The trade then revived in recent months as a plan to revisit the question of levies caused local prices once again to trade at a premium. US copper imports in December jumped to the highest since July.
“The logic behind this rally remains,” said Li. “We need to track the trend and not get fixated on absolute price levels.”
Equity markets have also rallied as the new year gets underway, with investors largely brushing off tensions in Venezuela to extend a three-year bull run fueled by demand for technology and artificial-intelligence–linked shares. The weakening dollar has also lent a tailwind to copper and other commodities priced in the currency as investors have piled into the so-called debasement trade.
The prospect of US import curbs, as well as optimism about demand given copper’s role in high-growth sectors like renewable energy, data centers and power grids, have fueled a wave of optimistic calls. Among them, Kostas Bintas, high-profile head of metals at Mercuria Energy Group Ltd., warned in a November interview that the import rush would leave the rest of the world without copper, predicting “this is the big one” for bulls.
Decision Time
Trump has directed the Department of Commerce to deliver an update on US copper markets by the end of this coming June, at which point a decision on tariffs for refined metal is expected. The department had earlier proposed a 15% levy starting in 2027, rising to 30% in 2028, but the White House has not confirmed that timeline.
The amount of copper now stored in the US has ballooned, with volumes in Comex-tracked warehouses alone now at more than half a million short tons after 44 straight days of net inflows. The tonnage in LME sheds has nearly halved over the past year, but is still higher than a recent low in June.
Meanwhile, other LME metrics point to a tightening copper market. Cash prices are trading at a premium of about $39 a ton over three-month futures — a backwardated structure that points to some near-term supply stress. On Comex, a discount of nearby futures over later contracts has widened in recent months, reflecting the surplus of stock.
Copper has also been supported over the past year by a series of accidents that halted production or stalled growth at some of the world’s biggest mines. Meanwhile, smelters have faced pressure from miners to accept record-low processing fees as they struggle to procure enough raw material, another sign of supply pressure.
The gains in metals also partly reflect a shifting geopolitical backdrop that could result in more fractured supply chains over the longer term. The recent US capture of Venezuelan leader Nicolás Maduro showcased Trump’s recasting of the world order, a push that also includes efforts by the US to secure access to raw materials.
Still, copper’s record-setting rally feels “incongruous” relative to the state of global supply and demand and physical spot markets, said Duncan Hobbs, head of research at Concord Resources Ltd. “It’s about critical supply and security of supply chains, with a new world order brought into sharp relief by events in Venezuela.”
Goldman Sachs Group Inc. said it remained constructive on copper, according to a note. The bank expects strong pricing to be sustained given limited supply growth. “Recent feedback from Chinese downstream sectors suggested no notable destruction on orderbooks amid high pricing,” it said.
Copper was up 0.9% at $13,100 a ton by 9:59 a.m. in London, after a gain of more than 4% on Monday. The other five base metals all gained, with nickel more than 5% higher and tin up 3.4%.
