The US has built a strategic copper stockpile. Can it hold on to it?

It turns out that the fastest way to build a strategic stockpile of metals is to threaten import tariffs without actually imposing them.

Since US President Donald Trump launched a national security investigation into copper imports in February 2025, copper prices on the Chicago Mercantile Exchange (CME) have traded at a premium to those on the London Metal Exchange (LME), drawing huge volumes of the metal into the United States as traders sought to profit from the price difference between the two markets.

When tariffs were announced at the end of July that year, they applied only to copper products. Since then, the White House has offered no concrete clarification regarding refined copper.

And why would it?

The United States now holds more than one million metric tons of copper, with additional shipments continuing to arrive thanks to the US tariff premium embedded in CME copper prices.

In just 18 months, the United States has achieved what took years to accomplish during the Cold War. The country now holds what is likely the world's second-largest copper stockpile, behind China's strategic reserves.

The challenge now is keeping it.

Rebuilding the strategic stockpile

The CME is racing to open new storage facilities to accommodate the sharp increase in copper imports. New delivery points have opened in Atlanta, Chicago, Laredo, Memphis and Mobile.

Exchange-registered inventories have surged from 88,595 metric tons in February last year to 711,617 metric tons currently.

LME warehouses in the United States also hold an additional 127,300 tons of registered inventories, alongside 123,828 tons of stocks not subject to outstanding exchange delivery warrants.

Including inventories held outside official exchanges, Citigroup analysts estimate that total US copper stocks amount to approximately 1.1 million tons.

That figure now exceeds the stockpile accumulated by the United States during the Cold War.

Copper holdings in the US National Defense Stockpile peaked at just over one million US short tons, equivalent to approximately 900,000 metric tons, in the early 1960s, according to a 1986 World Bank report.

The stockpiling program, which had operated for years and covered more than 100 metals and ores, underwent a dramatic reversal in 1962 after US President John F. Kennedy said he was "astonished to discover that the total value of the strategic stockpile now amounts to some $7.7 billion in materials," far exceeding the country's emergency requirements.

The United States subsequently began gradually reducing its strategic reserves over the following decades. By 1971, its copper holdings had fallen to 250,000 US short tons, while the final shipment of copper left a government warehouse in 1993.

More than three decades later, securing mineral supplies has returned to the forefront of White House priorities, bringing US copper inventories back into focus.

How can the United States retain its copper stockpile?

The fundamental difference between the current situation and the Cold War era is that today's stockpile is commercially owned rather than held by the government.

Copper is currently located in the United States because of the structure of the market. In theory, it could leave the country again if that structure changes significantly enough.

For now, the persistent premium on the CME is facing growing competition from the London and Shanghai markets, where spot premiums are rising in response to the massive movement of copper into the United States.

Of course, everything depends on whether Trump ultimately imposes tariffs on refined copper. Among the options still under consideration are phased tariffs of 15% in 2027, rising to 30% in 2028.

The problem for the White House is that any fixed tariff could eventually be overwhelmed by market forces. If supply shortages in the rest of the world become severe enough, global prices could rise above CME copper prices regardless of the tariffs imposed.

Another option for keeping the metal in the country would be to channel some of it into Project Vault, the new public-private strategic minerals reserve.

However, with copper trading at $14,690 per ton on the LME and at even higher prices on the CME, purchasing and storing such volumes would require enormous expenditure. Moreover, other strategic minerals, such as rare earth elements, are likely to take priority.

Nevertheless, having already disposed of one copper stockpile in the past, the United States is unlikely to want to see another slip through its fingers.

It is therefore understandable why the White House is keeping markets guessing. Strategic ambiguity is delivering results for now, giving the US administration more time to decide how to manage its growing copper stockpile.

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