What is driving the recent surge in copper prices and inventory drawdowns globally?

The surge in copper prices and rapid inventory drawdowns are driven by trade dislocations caused by the competing demands of the US and China: unprecedented hoarding in the US ahead of a potential White House decision on extending tariffs to raw copper, and accelerated shipments to China to alleviate tightness there amid falling domestic smelter output due to feedstock shortages and dwindling Shanghai Futures Exchange inventories; simultaneously, LME warehouse stocks have fallen over 40% since May, with major traders like Mercuria, Trafigura, Vitol, and Hartree withdrawing large batches—4,000 to 6,000 tons daily—from LME facilities in Taiwan, South Korea, and the US to meet these flows.

Why are LME copper inventories declining so sharply, and where is the metal going?

LME copper inventories are declining sharply—more than 40% since May—due to large-scale withdrawals by major trading firms including Mercuria, Trafigura, Vitol, and Hartree, with daily removals of 4,000–6,000 tons; much of this metal is flowing to China to offset reduced smelter output caused by tight feedstock supplies, while some is also moving to the US to capitalize on record-high Comex futures prices amid arbitrage opportunities and tariff-related hoarding.

Copper Market Crunch Brews as US and China Compete for Metal

Aug 7, 2026

Global copper prices surge toward record highs amid tightening inventories and trade tensions between the US and China. Tariff uncertainties and supply constraints in Chinese smelters are driving significant withdrawals from London Metal Exchange warehouses.

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