LME Spot Copper Premium Hits Highest Since 2021 as Inventories Fall for 42 Consecutive Days
Nashnova编辑部
The LME copper spot premium over futures has surged past $260/ton, the widest since the historic 2021 squeeze; stockpiles have fallen for 42 consecutive sessions to 204,975 tons, drained simultaneously by U.S. tariff-front-running and Chinese import demand.
How severe is the squeeze?
The LME September copper contract's premium over October futures widened past $260/ton on Friday — a level not seen since 2021, when the exchange had to impose emergency measures to contain a runaway spot rally.
This means → someone urgently needs physical copper and can't get it, bidding prices up in a classic squeeze — short-holders forced into a chain reaction of buying at ever-higher prices. The pressure is near a historical extreme.
Why do stockpiles keep falling?
LME copper inventories have dropped for 42 consecutive trading days, the longest streak since 2014, taking total stock down to 204,975 tons.
Critically, nearly half of existing stock is already earmarked for withdrawal. In plain terms = the warehouse shows 200,000-plus tons on paper, but far less is actually available for other buyers.
LME warehouses are the physical copper industry's last-resort supply pool — and the vehicle for settling expiring futures. As available stock shrinks → short-holders must bid aggressively, pushing the spot premium even higher.
Who is draining the copper?
The U.S. pull: traders expect the Trump administration may impose tariffs on refined copper; the arbitrage window is driving large volumes into the U.S. before any duty lands.
The China pull: end-use demand is soft, but smelters are cutting output due to tight raw-material supply, forcing downstream buyers to rely more on imports.
This means → the world's two largest copper-consuming markets are drawing from LME warehouses at the same time — which is why stockpiles have fallen 42 days running without a bounce.
Where is the copper price now?
The LME three-month benchmark copper contract traded above $14,100/ton on Friday, up nearly 14% year-to-date.
The spot contract has risen even faster, approaching $14,500/ton — close to the all-time high briefly touched in January. Some analysts expect a break above $14,500 soon.
Other base metals diverged: aluminium fell 0.6%, nickel dropped 0.4%, zinc rose 0.5%. This reflects a copper-specific squeeze story, not a broad industrial-metals rally.
What is the longer-term signal?
This squeeze sits on top of a structural narrative: mine supply is constrained while demand from renewables, data centres, and electric vehicles keeps climbing. The market widely expects copper to enter a deep supply deficit.
In plain terms = the short-term inventory squeeze and the long-term supply-demand imbalance point in the same direction — there isn't enough copper.
The key variable: whether LME available stock can hold until tariff policy becomes clear will determine how far this squeeze can run.
Content is for reference only, not financial advice.