U.S. Copper Stockpiles Exceed 1.6 Million Tons as Arbitrage Narrows and Backlog Effect Fades
nashnova research
The copper hoarding wave sparked by Trump's tariff threats is fading — U.S. on- and off-exchange stocks total roughly 1.6 million tonnes, but the arbitrage spread has collapsed from a peak above $3,000/tonne to about $310/tonne, draining the incentive to ship more metal stateside.
How did 1.6 million tonnes of copper pile up in America?
Trump ordered a copper-tariff feasibility study last February. Comex copper rallied to a record $6.83 per pound by September.
The Comex–LME spread topped $3,000/tonne — This means → shipping copper to the U.S. was a high-margin arbitrage trade, and global traders rushed in.
The result: Comex warehouse stocks surged nearly 750% from late February, topping 714,000 tonnes — roughly 70% of global visible copper inventory.
The spread has collapsed — why isn't the copper leaving?
The arbitrage gap has crashed from $3,000/tonne to about $310/tonne. In plain terms = the profit has shrunk by 90%; shipping more copper stateside barely pays.
Wood Mackenzie analyst Charles Cooper noted the U.S. "built a copper reserve through policy and tariff threats" without spending taxpayer money.
Yet the metal is stuck. Only a severe shortage outside the U.S. — pushing LME and Shanghai prices well above Comex — would create an incentive to re-export. This reflects an awkward reality: copper flows in easily but has no clear route out.
Will the tariff actually land? The January deadline looms
The Commerce Department was due to finish its copper-market review by June 30 this year, advising Trump on a potential 15% refined-copper tariff (rising to 30% by 2028). No decision has been announced.
Macquarie analyst Alice Fox expects the most likely scenario: no resolution by the January 2027 deadline, leaving the tariff question open.
This means → the spread may dip briefly, then settle near current levels — "not enough to attract more metal in, but enough to keep metal in the U.S."
Who won, who lost, and what comes next?
Panmure Liberum analyst Tom Price was blunt: "Only the traders are making money." They sourced copper cheaply worldwide and shipped it to the U.S. for the spread.
U.S. copper imports topped 1.62 million tonnes last year, up 80% from 2024; domestic output was about 1 million tonnes — the gap signals a massive surplus.
When and how the tariff lands is the pivotal variable, and the top agenda item at this week's LME annual gathering in London.
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