Copper inventories surge 50% on LME: pricing and project signals for mine planners
Reviewed by Tom Sullivan
First reported on MINING.com
30 Second Briefing
Copper inventories on the London Metal Exchange have jumped more than 50% in three days, with on-warrant stocks up 63,000 tonnes across Asia, the US and Europe, sharply easing a steep cash-to-three-month backwardation that had reached nearly $550 per tonne. The cash-to-three-month spread has already compressed from $436 to about $176 per tonne, while three-month copper has slipped to $13,885 per tonne, down almost $300 since Monday. Benchmark’s Albert Mackenzie links the volatility to US tariff uncertainty, which is pulling large copper volumes into the US and creating regional supply distortions.
Technical Brief
- On-warrant LME copper stocks rose 63,000 tonnes between 17–19 August, across Asia, US and Europe.
- Total LME stocks increased only 28,000 tonnes, indicating substantial re-warranting of previously cancelled metal.
- On-warrant inventories had already fallen ~175,000 tonnes over June–July, setting up the squeeze conditions.
- Over $400/t of the nearby premium was concentrated between August and September contracts, distorting short-dated pricing.
- Backwardation levels created a clear carry trade incentive for physical holders to deliver into LME warehouses.
- Market sources suggest one large trading house orchestrated much of the delivery, with additional tonnes from Chinese participants.
- Benchmark’s Albert Mackenzie links the abnormal flows to US tariff uncertainty pulling “huge amounts” of copper into the US.
- Ongoing tariff ambiguity is flagged as a structural risk for repeated regional tightness and price volatility episodes.
Our Take
The 50% jump in LME copper inventories and easing backwardation comes after a run of record copper price pieces in late 2025 and early 2026 in our database, suggesting some short-term relief for fabricators that were previously squeezed by extreme nearby premiums.
Benchmark Mineral Intelligence also features in recent lithium coverage around CATL’s Jianxiawo mine, and its presence here signals that traders and project financiers are increasingly relying on the same analytics houses to interpret cross-commodity tightness in copper, lithium and other critical minerals.
Prepared by collating external sources, AI-assisted tools, and Geomechanics.io’s proprietary mining database, then reviewed for technical accuracy & edited by our geotechnical team.
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