The United States has quietly built up its largest copper inventory in decades, a move that is distorting the trade pattern of this red metal flowing to other regions around the world. Over the past year, the inflow of copper into U.S. inventories has been accelerating, intensifying upward pressure on prices.
The United States has quietly built up its largest copper inventory in decades, a move that is distorting the trade flows of this red metal to other regions around the world.
Over the past year, the inflow of copper into U.S. stockpiles has continued to accelerate, exacerbating upward price pressures. The higher prices have created a ripple effect throughout the copper supply chain.
Why is so much copper flowing into the United States?
Since Trump's return to the White House, his tariff agenda has loomed over the copper market.
Market concerns that he might impose import tariffs on refined copper, the most commonly traded form of this industrial metal, drove U.S. copper prices above the global benchmark set in London during the first half of last year. The premium of New York over London became so profitable that trading firms such as Mercuria Energy Group Ltd., Hartree Partners LP, and Trafigura Group rushed to ship copper to the United States.
For most of 2025, U.S. copper prices will remain at a premium.
This transatlantic shipping boom temporarily slowed after Trump unexpectedly announced in July last year that he would exempt refined metals from tariffs but impose a 50% tariff on semi-finished copper products, such as pipes and wires, as well as so-called derivatives, including electronic components.
However, Trump stated that he would reevaluate this decision in the second half of this year, reigniting concerns that tariffs could be imposed on commodity-grade copper. The New York-London price spread, which had narrowed significantly in July last year, widened again, and U.S. inventories continued to swell.
According to data from the U.S. Geological Survey, the United States imported 1.7 million tons of copper last year, nearly double the amount from the previous year.
U.S. refined copper imports in 2025 are twice the average level of the past four years.
What is the scale of copper stockpiles in the United States?
Since the beginning of 2025, copper stored in secure warehouses approved by the exchange as delivery guarantees for Comex copper futures contracts under the Chicago Mercantile Exchange (CME) has continued to grow. As of February 6, Comex inventories stood at 589,081 short tons (534,405 metric tons), more than five times the level a year ago and the highest on record since CME data began in 1989.
Bank of Montreal Capital Markets estimates that, including metal held in off-exchange stockpiles, total copper reserves in the U.S. amount to approximately 1 million metric tons. This is roughly equivalent to the annual output of Escondida, the world's largest copper mine located in Chile.
Comex copper inventories surge to record highs
How does the U.S. copper stockpiling impact global markets?
The inflow of copper into the U.S. has tightened supply to the rest of the world, exacerbating pressures from a series of production disruptions at mines ranging from Chile to Indonesia.
These two dynamics, coupled with speculative trading activities, have driven copper prices to record levels. Copper prices on the London Metal Exchange (LME) surged above $14,500 per metric ton in late January before pausing amid a broad-based selloff in bulk metals.
Analysts at Goldman Sachs Group warned that copper prices have exceeded fundamentals. David Wilson, a strategist at BNP Paribas, stated in February that the metal remains "overvalued," with price levels above $11,000 to $11,500 per metric ton being "almost entirely driven by speculation."
Elevated copper prices have impacted processors in copper-consuming countries. These processors, who transform copper into wires, tubes, and foils for manufacturers, have struggled to pass rising raw material costs onto customers. With near-record prices dampening industrial demand for copper, many copper processing plants in China are expected to extend production halts during the Spring Festival holiday.
Despite long-term optimism about growing copper demand driven by renewable energy technologies, electric vehicles, and artificial intelligence data centers, weak near-term demand prospects are reflected in warehouse inventories on exchanges in London, Shanghai, and New York, which have reached their highest levels since 2003.
What fate might await the massive U.S. copper inventories?
Analysts and traders initially worried that if refined copper ultimately did not make it onto Trump's tariff list, the accumulated copper in the U.S. could flood into the global market and depress prices.
Recently, opinions have shifted towards the belief that the large, or even larger, inventories in the U.S. may persist as both businesses and the government aim to safeguard their domestic manufacturing base from supply shortages, extreme price volatility, and over-reliance on imports. This sentiment has been bolstered by the Trump administration's plan to establish a $12 billion critical minerals reserve through public-private partnerships, known as the 'Vault Plan'.
It remains unclear how much of the 'Vault Plan' will be specifically allocated to copper. Copper is one of the 60 minerals deemed 'critical' by the U.S. government due to its high risk of supply chain disruptions. Robert Friedland, a mining billionaire present at the February launch of the 'Vault Plan' in the White House Oval Office, stated that this red metal will undoubtedly be included.
At the heart of this argument is the notion that the current increase in copper inventories we are witnessing may not only be driven by commercial behavior but also potentially by government initiatives,' wrote analysts at the Bank of Montreal in a January report.
Is there any precedent for the U.S. stockpiling large quantities of copper?
Compared to other periods of significant geopolitical turmoil in history, today’s inventories appear less exaggerated,' stated a report by the Bank of Montreal.
During the Cold War, the U.S. stockpiled minerals in an effort to secure sufficient supplies during its prolonged conflict with the Soviet Union. In the early 1960s, its copper reserves were equivalent to ten months of consumption.
According to estimates by the Bank of Montreal, the current 1 million tons of copper held by the U.S. is roughly sufficient to meet seven months of demand.
Does the U.S. have enough warehouse capacity to accommodate all this copper?
Yes. The Chicago Mercantile Exchange added 649,979 short tons of copper storage capacity in the United States last year, bringing the total storage capacity to just over 1.1 million short tons, distributed across seven states: Arizona, Kentucky, Louisiana, Maryland, Michigan, Texas, and Utah.
Meanwhile, warehousing companies are still applying to offer additional copper storage space at locations approved by the Chicago Mercantile Exchange.
For example, Henry Bath LLC applied in January to provide warehousing capacity in Cartersville, Georgia, for storing copper that meets the delivery standards of the New York Mercantile Exchange copper futures contract. If approved, this would become a new location in the New York Mercantile Exchange's registered copper warehousing network.
Editor/Doris
