Author：Currency Explorer

The United States has quietly built up its largest copper stockpile in decades, a move that is distorting the trade patterns of this red metal as it flows to the rest of the world. Over the past year, the inflow of copper into US inventories has accelerated, exacerbating upward pressure on prices. Higher prices have already had a ripple effect throughout the copper supply chain. Why is so much copper flowing to the United States? Since Trump returned to the White House, his tariff agenda has been looming over the copper market. Market concerns that he might impose import tariffs on refined copper (the most common form of trading for this industrial metal) drove U.S. copper prices above the global benchmark set by London in the first half of last year. The premium in New York over London was so lucrative that trading companies such as Mercuria Energy Group Ltd., Hartree Partners LP, and Trafigura Group rushed to ship copper to the U.S. For most of 2025, US copper prices will be at a premium. The transatlantic shipping boom temporarily slowed down after Trump unexpectedly announced in July last year that he would exempt refined metals from tariffs and instead 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's statement that he will reassess the decision in the second half of this year has reignited concerns about potential tariffs on commodity-grade copper. The New York-London price spread, which narrowed sharply last July, has widened again, and US inventories continue to swell. According to data from the U.S. Geological SurveyThe United States imported 1.7 million tons of copper last year, almost double the amount imported the previous year. U.S. refined copper imports in 2025 will be double the average level of the past four years. How large are the copper inventories in the United States? Since the beginning of 2025, copper storage in secure warehouses approved by the exchange and serving as delivery guarantees for futures contracts on the CME Group's New York Mercantile Exchange (Comex) has been steadily increasing. As of February 6, Comex inventories stood at 589,081 short tons (534,405 tons), the same level as a year ago.More than five timesThis is also the highest level since 1989, according to all CSI 600 records. BMO Capital Markets estimates that if over-the-counter metal inventories are included,The United States has approximately 1 million tons of copper reserves.This is roughly equivalent to the annual output of the Escondida mine in Chile, the world's largest copper mine. Comex copper inventories surge to record high How will the US copper hoarding affect the global market? Copper flows into the United States have tightened supplies to the rest of the world, exacerbating pressure from production disruptions at a range of mines from Chile to Indonesia. These two dynamics, coupled with speculative trading activity, have pushed copper prices to record levels. Copper prices on the London Metal Exchange (LME) surged to over $14,500 per tonne in late January before taking a breather amid a general sell-off in bulk metals. Goldman Sachs analysts warned thatCopper prices have exceeded fundamentals.David Wilson, a strategist at BNP Paribas, said in February that the metal "remains overvalued," with prices above $11,000 to $11,500 per tonne."Almost entirely driven by speculation". High copper prices have impacted processors in copper-consuming countries. These processors produce copper into wires, tubes, and foils for manufacturers, but are struggling to pass on rising raw material costs to their customers. With near-record prices suppressing industrial demand for copper, many copper processing plants in China are expected to extend their shutdowns during the Lunar New Year holiday. Despite optimism about long-term growth in copper demand from renewable energy technologies, electric vehicles, and AI data centers, the weak near-term demand outlook is reflected in inventories at London, Shanghai, and New York exchange warehouses, which have reached their highest levels since 2003. What fate might befall the massive U.S. copper inventory? Analysts and traders initially worried that if refined copper was ultimately not included in Trump's tariff list, copper stockpiled in the United States could flood the global market and depress prices. recent,Opinions have shifted to the view that the huge, or even larger, inventory in the United States may persist.This sentiment is fueled by a desire among businesses and governments to protect their domestic manufacturing base from supply shortages, volatile prices, and over-reliance on imports. The Trump administration's plan to establish a $12 billion critical mineral reserve through a public-private partnership (known as the "Treasury Plan") exemplifies this. It remains unclear how much of the "Treasury Plan" will be specifically allocated to copper. Copper is one of 60 minerals that the U.S. government considers "critical" and at high risk of supply chain disruptions. Mining billionaire Robert Friedland, who attended the "Treasury Plan" launch ceremony in the Oval Office in early February, said the red metal will undoubtedly be included. "At the heart of this argument is that the increase in copper inventories we are witnessing today may not only be a business activity, but could also be government-driven," BMO analysts wrote in a January report. Is there any precedent for the United States stockpiling large quantities of copper? The Bank of Montreal report states, "Compared to other periods in history that have experienced significant geopolitical upheaval, today's inventory still appears less exaggerated." During the Cold War, the United States stockpiled minerals in an attempt to secure sufficient supplies during its years-long conflict with the Soviet Union. In the early 1960s, its copper reserves were equivalent to 10 months of consumption. According to estimates from the Bank of Montreal,The United States currently holds 1 million tons of copper, enough to meet its needs for approximately seven months.. Does the United States have enough warehouse space to hold all of this copper? Yes. CME Group added 649,979 short tons of copper storage capacity in the United States last year, bringing its 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 for additional copper storage space at locations approved by CME Group. For example, Henry Bath LLC applied in January for warehousing capacity in Cartersville, Georgia, to store copper that meets the delivery standards for New York Mercantile Exchange (NYMEX) copper futures contracts. If approved, this would become a new location in the NYMEX-registered copper warehousing network.