Key Takeaways:
LME copper rose 1.47 percent to $14,368 a tonne, within $160 of its record, as tariff-driven shipments to the United States tightened global supply.
LME warehouse stocks fell for a 42nd day to 204,975 tonnes, the smallest since February, with nearly half already earmarked for withdrawal, according to exchange data.
The spot-to-three-month premium widened to $478 a tonne, the largest backwardation since the 2021 squeeze, as traders moved metal to the United States ahead of potential refined copper tariffs. Supply setbacks added to tightness, with Codelco abandoning its growth target, BHP lowering copper guidance and Antofagasta cutting output.
Three-month copper, up more than 15 percent this year after seven straight weekly gains, last traded above $14,500 in late January. The timing and scale of the Trump administration's tariff decision is the next key variable, with the LME having introduced emergency measures to contain the spot rally.
The squeeze is rooted in expectations that Washington will impose duties on refined copper, prompting traders and manufacturers to front-run the levy by shipping metal stateside. That has drained availability elsewhere, pushing cash copper near a record $14,500 a tonne while the three-month contract trades above $14,100, up nearly 14 percent for the year. The LME has introduced emergency measures to contain the spot rally, a step it last took during the 2021 nickel and copper dislocations.
Mine disruptions compound the tightness. Codelco, the world's largest producer, has abandoned its growth target, while BHP cut copper guidance to as low as 1.65 million tons in fiscal 2027 on declining South American grades, and Antofagasta trimmed output. The supply shortfall is lifting copper equities: Sandfire Resources gained 2.4 percent and BHP 1.3 percent on the ASX on Monday, though BHP trades at about 17 times forward earnings versus a five-year average of 11, with Citi preferring Glencore for copper exposure.
This article is for informational purposes only and does not constitute investment advice.
