Copper Hits All-Time High on LME as Tariff Expectations and Supply Tightening Converge
nashnova research
LME copper futures touched $14,533 per tonne on September 7 — a record — driven by tariff-related stockpiling in the U.S. and falling global mine output, though analysts warn the rally's medium-term footing may be weaker than the market assumes.
Why did copper just break its record?
LME copper hit $14,533 per tonne intraday, topping the January high and closing up 0.7%.
The short-term driver: traders are betting the Trump administration will impose import tariffs on refined copper, so metal is being shipped to the U.S. early to lock in the spread.
The Commerce Department was supposed to submit its tariff recommendation months ago; it still hasn't. This means → the market is repricing around a policy that hasn't landed yet.
How did global inventories get so lopsided?
Total copper stocks are not especially low — but a disproportionate share is now parked in the U.S., leaving LME's global warehouse network sharply depleted.
In plain terms = the copper didn't vanish; it moved to one country, and everywhere else ran short.
That mismatch squeezed short-term supply elasticity, pressured short sellers, and pushed prices higher.
Tariffs on or off — bearish either way?
Rafael Barcelos, head of LatAm metals & mining research at Bradesco BBI, argues the market is wrong to treat tariffs as a simple bull/bear binary: both outcomes skew bearish at the medium term.
No tariff → U.S.-stockpiled copper flows back into global markets, adding supply. Tariff imposed → U.S. buyers already stocked up, so near-term purchases drop and regional demand eases.
His base case: phased, gradual tariffs that stretch U.S. seaborne buying over a longer window — smoothing rather than eliminating the adjustment and capping near-term downside.
How tight is the mine side, really?
Copper is up 17% over the past year, underpinned by structural demand from data centres, renewables and grid expansion outpacing ageing mines.
Global mine output fell 1.1% year-on-year in H1 2026; major producers — roughly two-thirds of global supply — were down 3.5% in H1, with the Q2 decline widening to 4.1%.
Chile took the hardest hit: extreme weather forced Antofagasta to cut guidance to 625k–655k tonnes (from 650k–700k) and Lundin Mining to 300k–325k tonnes (from 310k–335k). August copper exports fell to their lowest in over a year.
Morgan Stanley started the year forecasting supply growth; it now expects flat to slightly down output. This means → the first annual production decline since 2017 is on the table.
Miners are profiting — are the challenges gone?
Rio Tinto, BHP, Glencore and Zijin Mining all reported sharp profit growth in their latest results, with copper a major contributor.
Yet the feedstock bottleneck at the refining stage persists: tight concentrate supply has pushed Chinese smelters toward scrap, with July copper-scrap imports up 15% year-on-year.
This reflects a disconnect — high prices have not translated into effective mine-output recovery. The record has been set; whether this rally finds a new medium-term equilibrium depends on the tariff outcome and whether mine operations can stabilise.
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