Copper has hit another milestone, with cash prices on the London Metal Exchange (LME) surging to a record above US$14,850 ($20,930) per tonne amid an ongoing squeeze in near-term supply.
The benchmark three-month contract also climbed to around US$14,315 per tonne, closing in on the US$14,500 record set in January.
Premiums for immediate copper delivery have widened sharply in recent sessions, with the cash-to-three-month spread reaching levels last seen during the historic LME squeeze of 2021.
On Tuesday, the one-day spread also surged to its widest since that squeeze, with buyers willing to pay as much as US$110 per tonne to secure copper just one day earlier.
The move comes as some traders need to cover short positions ahead of the third Wednesday of the month, a key settlement date for LME contracts.
Inventories tighten
The spike in cash premiums follows a sharp drawdown in copper inventories across LME-registered warehouses, as traders continue to position for the possibility of US tariffs on refined copper.
US President Donald Trump’s Commerce Department was due to make a recommendation on copper tariffs by the end of June, but the White House has yet to announce a decision.
In the meantime, copper has continued to flow towards US ports, encouraged by higher prices in the American market.
Comex copper futures recently hit a record, while US copper imports reached their highest level in 12 years last month.
According to LME data, copper inventories in approved warehouses had roughly halved over the past three months to below 205,000 tonnes, their lowest since mid-February. Stocks have since recovered this week to more than 233,000 tonnes.
Inventories have also been declining in warehouses monitored by the Shanghai Futures Exchange. At the same time, the Yangshan copper premium, a gauge of Chinese demand for imported metal, has weakened.
Demand outlook supports copper
Beyond the immediate supply squeeze, copper continues to benefit from expectations of growing demand from data centres, renewable energy, and power infrastructure.
The metal has gained more than 12% this year, putting it among the stronger-performing major commodities.
The shift is also showing up in the results of the world’s largest miners, with copper accounting for more than half of BHP’s (ASX:BHP) revenue in its latest reporting period.
Write to Jackson Chen at Mining.com.au
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