LME Copper Inventories Surge Over 20,000 Tonnes in a Single Day, Easing Historic Squeeze Pressure
Nashnova编辑部
LME copper inventories jumped over 20,000 tonnes in one day — the biggest single-day rise since April — as a weeks-long historic squeeze showed clear signs of easing, with traders shipping metal back to exchange warehouses after the tariff-arbitrage thesis fell apart.
Who is shipping copper back into LME warehouses?
LME copper stocks rose by more than 20,000 tonnes on Tuesday, the largest single-day increase since April.
Bloomberg reported that Trafigura was a key participant in the deliveries; other trading houses are also arranging shipments into exchange warehouses.
This means → copper that had been locked outside the exchange system is returning in bulk, loosening the physical foundation of the squeeze.
How did copper prices and spreads react?
The LME three-month benchmark traded at $13,976 per tonne on Wednesday morning, down as much as 0.5% intraday; Tuesday's 1.2% drop was the steepest since July 23.
The cash-to-three-month spread — the spot premium measuring near-term tightness — fell from a squeeze-level high of $545/tonne on Monday to $248/tonne, more than halving in one session.
The overnight Tom/next spread also dropped sharply; it had previously surged to the highest level since the major 2021 squeeze.
In plain terms = the wider the spread, the more desperate the demand for immediate copper. A narrowing spread signals panic is receding.
What caused the squeeze in the first place?
The root cause: massive copper shipments to the U.S., driven by traders betting on upcoming U.S. import tariffs and front-running the arbitrage.
In plain terms = traders gambled that tariffs were coming, so they moved copper to the U.S. to "claim a spot" — draining LME warehouses in the process.
But the Commerce Department's deadline to submit tariff recommendations to President Trump passed in June, and the White House has made no announcement since.
This means → the arbitrage thesis lost its premise. With no tariff in sight, copper sitting in U.S. warehouses became a cost burden, and traders began rerouting metal back to the LME.
Is the squeeze really over?
Whether the inventory inflow continues and near-term spreads keep narrowing are the key checkpoints for judging if the squeeze has fully unwound.
The spot premium still sits at $248/tonne — well above normal levels. Relief has begun, but tightness has not fully dissipated.
This reflects a market still watching: if the White House continues to stay silent on tariffs, the return flow should accelerate; any renewed tariff signals could tighten conditions again.
Content is for reference only, not financial advice.