Copper Surges to Fresh Record as Inventories ‘Locked in the US’
(Bloomberg) -- Copper extended a powerful rally after bursting through $13,000 a ton for the first time, as investors bet on tighter supply 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 on the London Metal Exchange 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.
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While demand has slowed in recent months — particularly in top consumer China — buyers there are being pulled into a bidding war to secure supplies as copper continues to gravitate toward the US. Trading dynamics on the LME this week point to a newly bullish mood in China, with prices spiking on large volumes during the Asian trading session, and rallying again later in the day as the Shanghai Futures Exchange reopened for evening trading.
“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.
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