US copper imports hit 12-year high, cutting LME inventories by 14%

September copper futures on COMEX hit a record $6.7140 per pound on August 12, 2026, surpassing the previous peak of $6.7045 set on August 5, before retreating to $6.6335 later in the session. Prices fell below $6.55 the following day, their lowest level in more than a week, but remained up around 18% since the start of 2026 and 46% over the past 12 months.

On August 11, LME cash copper closed at $14,424.50 per metric ton, a $207.50 premium to the three-month contract at $14,217. The spread, known as backwardation, widened sharply from around $34 per ton at the end of July, pointing to tight availability of copper for immediate delivery, though not necessarily an annual supply deficit.

US imports surge above 200,000 tons, draining LME inventories and widening spot premium

US refined copper imports exceeded 200,000 metric tons in July 2026, the highest monthly total in 12 years.

By August 12, copper inventories at the London Metal Exchange had fallen 14%, or by more than 35,000 tons, from the end of July to 214,550 tons.

The movement of copper into US warehouses reduced the amount of metal available to settle LME contracts, helping push the premium of cash copper over the three-month contract to $207.50 per ton.

The US already imposes a 50% tariff on imports of semi-finished copper products, while the Commerce Department has recommended a broad 15% tariff on refined copper starting January 1, 2027, rising to 30% on January 1, 2028.

Until the White House makes its decision, uncertainty surrounding the tariffs gives traders an incentive to keep imported copper in US warehouses, limiting the amount available to settle LME contracts.

Refined copper output growth of just 0.4% limits supply response

The International Copper Study Group (ICSG) reported that global mine production fell 1.6% during the first five months of 2026, with output declining in Chile, the Democratic Republic of Congo and Indonesia, limiting the market’s ability to respond quickly to higher prices.

The group’s April 23 forecast projected growth of just 0.4% in global refined copper production in 2026.

Natalie Scott-Gray, senior metals demand strategist at StoneX, said the delayed White House tariff decision remains the market’s main catalyst.

Base case: Confirmation of a 15% tariff on refined copper from January 1, 2027 would likely accelerate copper flows into US warehouses ahead of implementation, tighten supplies outside the US and widen the COMEX premium over London. Société Générale models put the probability of the measure being implemented at just 14.6%.

Bear case: An exemption for refined copper, similar to the decision made on July 31, 2025, would reverse the COMEX-London arbitrage and allow copper currently stored in the US to return to global deliverable inventories.

Concentrate shortage strengthens sellers’ position

Barrick Mining said in its August 10 results that all-in sustaining costs for copper production reached $3.95 per pound in the second quarter of 2026, up 36% year-on-year.

With copper trading near $6.56 per pound on August 14, the price stood roughly $2.61 per pound above all-in sustaining costs, limiting the pressure created by rising production expenses.

S&P Global Market Intelligence estimated in April that more than 99% of copper production had estimated costs below the average price forecast for 2026.

At the same time, copper concentrate producers have gained greater bargaining power. Spot treatment and refining charges, known as TC/RCs and typically paid by miners to smelters, fell to around minus $126.80 per dry metric ton by the end of June 2026, compared with a zero benchmark, effectively meaning smelters were paying miners to secure raw material.

In July, Antofagasta agreed to sell copper concentrate to some Chinese smelters under pricing linked to the spot market with a guaranteed floor, rather than using the traditional fixed benchmark system.

The White House missed its June 30, 2026 deadline and has yet to set a new date for its decision, making it more difficult to manage positions tied to the timing of the tariffs.

Concentrate producers offer exposure that is less directly tied to tariff policy, as negative treatment and refining charges strengthen their pricing power regardless of the White House’s eventual decision.

$34 spread becomes a key signal for the copper market

Tight availability of deliverable copper outside the US supported prices on August 11, when LME inventories stood at 214,550 tons and the cash-to-three-month premium reached $207.50 per ton.

Keeping inventories below roughly 215,000 tons while the spread remains above $150 per ton would preserve pricing power for suppliers able to provide copper for immediate delivery.

By contrast, an exemption for refined copper from US tariffs would unwind the arbitrage between COMEX and London.

A rise in LME inventories above 255,400 tons, their level at the end of July 2026, would also signal that copper is returning to global deliverable stocks and would likely narrow the premium currently rewarding immediate supply.

The LME publishes inventory and pricing data every business day, while the International Copper Study Group updates its refined copper market data around the 21st of each month.

Short-term copper exposure should be reassessed if LME inventories rise above 255,400 tons or if the cash-to-three-month spread narrows toward $34 per ton, as either development would signal greater availability of copper for immediate delivery.