U.S. Copper Stockpiles May Reach 2 Million Tons, Raising Global Supply Shortage Risks
nashnova research
US warehouses now hold an estimated 2 million tonnes of refined copper; tariff uncertainty is keeping the metal locked in, copper futures are up over 16% this year, and the supply-squeeze thesis is edging toward the price level that forces industrial users to switch.
How did 2 million tonnes of copper end up in US warehouses?
Last July Trump slapped tariffs on copper products but exempted refined copper, while ordering a review of whether to tax it too.
Policy still unresolved → US buyers stockpiled aggressively, driving copper futures up over 16% this year. The persistent US price premium then pulled even more metal in from abroad.
This means → tariffs haven't actually landed on refined copper yet, but the fear alone has sucked it into the US. BMO Capital Markets estimates the hoard at 2 million tonnes — effectively a massive private-sector strategic reserve.
Why can't this copper flow back out?
Daniel Ghali, head of metals research at Deutsche Bank, says: "Once the metal arrives in the US, it is effectively unavailable for purchase by other global demand centres."
Normally, when copper is tight, the London Metal Exchange's near-month premium draws holders to deliver metal to LME warehouses for arbitrage. But the LME has warehouses inside the US → the arbitrage just moves copper from one American facility to another, not back onto the global market.
In plain terms = the market's usual pressure-release valve doesn't work here — once copper is in the US, price signals alone can't pull it out.
How high does the price need to go to force substitution?
Ghali forecasts copper will rise 50% next year to $10 per pound (roughly $22,050 per tonne).
This means → he believes that is the threshold at which industrial users switch en masse to aluminium — a cheaper but less conductive alternative — cooling demand enough to prevent global supply from running dry.
Important caveat: this is an extreme scenario. Most analysts do not expect a move that sharp.
Does China have enough copper on its side?
BMO analysts wrote this week that "the challenges facing global mine supply have never been more acute," partly because top producer Chile has faced weather-related disruptions.
More critically, BMO's analysis of Chinese trade data suggests Beijing may have been drawing down its opaque state copper reserves and could need to restock — tightening global supply further.
Ghali estimates that by year-end the US and China together will have locked up roughly 70% of the world's available copper inventory. This reflects a squeeze from both of the largest economies at the same time.
What does Goldman Sachs make of all this?
Goldman analysts noted last week that tariff risk has pulled metal stockpiles into the US "without large-scale government procurement and without immediately raising costs for downstream consumers" — in effect achieving a national-security strategic-reserve goal by accident.
In plain terms = the government didn't spend a dollar building a reserve; market panic did the hoarding for it — but the cost is less copper everywhere else.
The US is advancing new mines, new refineries, and government-backed reserve plans, but all have long lead times. Until tariff policy is settled, "when does US copper get released" remains the central unanswered question for global copper markets.
市场有风险，内容仅供研究参考，不构成投资建议。