Copper prices climbed above $14,000, reaching a two-month high on Tuesday driven by decreasing inventories outside the United States and potential Iran war resolution. According to reports from The Economic Times and Bloomberg, benchmark three-month copper on the London Metal Exchange jumped above $14,000 shortly after the release of LME stocks data at 0800 GMT, rising as much as 1.3% to $14,053 a metric ton. The metal was trading up 1.1% at $14,024.50 as of 0900 GMT, marking its highest level since June 2. The surge was fueled by dwindling inventories outside the U.S. and hopes for a resolution of the Iran war, even as the status of negotiations was unclear. Copper rose 0.5% to $13,938 a ton at 2:17 p.m. Shanghai time, as all six of the LME's main metals recorded gains.
The latest surge comes as traders monitor ballooning volumes held in the US ahead of an expected decision on import tariffs by President Donald Trump. According to Bloomberg, more than 200,000 tons of copper arrived at US ports in July, the largest monthly volume in IHS Markit shipping data dating back to 2014. This has added to a huge hoard in American warehouses and ports, sapping availability for buyers elsewhere in the world. The US influx has gathered pace despite uncertainty over plans for a tariff on refined copper, with the Commerce Department scheduled to deliver a recommendation by June 30, but a decision has yet to be announced. US prices remain at a premium to those on the LME, keeping the trade profitable. Copper rose 0.5% to $13,938 a ton at 2:17 p.m. Shanghai time, as all six of the LME's main metals recorded gains.
The LME's warehouse update showed available inventory fell to 94,200 tons, representing little more than a day's worth of global consumption. As reported by Reuters, the data showed orders to withdraw another 7,225 tons of copper from LME warehouses, with many of the canceled warehouse receipts linked to New Orleans, a US storage point where metal can be rerouted into the COMEX futures system. This helped push the cash-to-three-month spread up to $115 a ton, the steepest premium since January. The cash-to-three-month spread represents what buyers pay for copper now versus in three months, and when tradable stock gets this thin, buyers start paying extra for immediate supply. This isn't just a headline price jump: it's the copper curve signaling that the shortage is in metal that can settle LME contracts today.
The New Orleans withdrawals create a straightforward arbitrage opportunity: take LME-deliverable copper out of the LME network and move it to where it earns more, which can keep the LME's front end in backwardation even if longer-dated prices don't move as much. If the New Orleans withdrawals keep feeding the LME-to-COMEX flow, the dislocation between the two exchanges can persist, and the pain shows up most in the cash spread rather than in prices years out. This raises the cost of rolling short positions in near-month LME copper, as traders have to keep paying up to stay short, and can make day-to-day moves in spot pricing more abrupt than what you'd expect from a slow, economy-wide demand story.
Copper has rallied about 12% this year after reaching a record high in January, with its performance aided by speculation about US trade policy as well as deep-seated enthusiasm about prospects for global demand driven by the energy transition and the build-out of artificial intelligence infrastructure. As reported by Bloomberg, copper rose 0.9% to $13,999 a ton at 10:08 a.m. in London, as all of the other five main LME metals also gained. Zinc advanced 0.3% from its highest close since 2022, while aluminum rose to its highest since mid-June. At the same time, new mines are getting harder to find and more expensive to develop, adding to supply constraints. Copper traded at $6.52/lb, about 47% above year-ago levels and just below its record high of $6.67/lb reached in June. J.P. Morgan projects a 330,000-ton refined copper deficit in 2026, while the ICSG forecasts a 150,000-ton deficit, both assuming data center demand will consume about 475,000 metric tons of copper in 2026.
