Copper waiting to leave warehouses has reached its highest level since 2021, as traders move to deliver the metal to the U.S. ahead of impending tariffs, according to data from the London Metal Exchange (LME).
The Financial Times reports that the volume of copper marked for shipment from LME warehouses soared to 102,000 tonnes on Wednesday, a dramatic jump from just 10,000 tonnes the previous week. Such a sharp increase is rare in the copper market, with the last comparable spike occurring in 2021 when outbound copper surged over several weeks to more than 160,000 tonnes.
Although the LME data does not specify the final destination of the metal, traders suggest that much of it is heading to the U.S. before the imposition of tariffs. President Donald Trump, who is seeking re-election, has pledged to introduce a 25% tariff on all steel and aluminum imports starting March 12 and has ordered an investigation into copper dumping in the U.S., potentially paving the way for tariffs on copper as well.
These policy moves have triggered distortions in metals markets, as U.S. importers rush to build stockpiles before new trade barriers take effect. The price premium for copper futures on the New York Comex over LME copper spiked to more than $1,000 per tonne this month before falling to around $600. Traders in the U.S. have also been paying significantly higher prices for copper, aluminum, and steel compared to their European counterparts.
Chile’s Antofagasta CEO, Iván Arriagada, highlighted the “arbitrage opportunity” created by the market distortions, allowing traders to shift inventories to the U.S. to take advantage of price differences. Meanwhile, copper inventories in U.S. Comex warehouses have reached their highest levels since early 2019.
Much of the copper stockpiled in LME warehouses consists of Russian and Chinese metal, which is subject to restrictions in the U.S. Analysts note that it may be difficult to move this sanctioned metal into the U.S., meaning alternative trade routes will need to be established. As a result, Russian and Chinese copper may be redirected to other markets, while Chilean copper could be sent to the U.S. instead.
With trade tensions rising and concerns over a potential slowdown in economic growth, copper futures on the LME fell to around $9,300 per tonne on Friday, marking a two-week low. The ongoing shifts in supply chains and tariffs are expected to keep the metals market in flux in the coming weeks.
