A cliff-like drop in copper inventories at the London Metal Exchange (LME) is rewriting market rules. On Monday (June 23), the cash premium for copper over three-month futures surged to $345 per ton, hitting the highest level since 2021. This supply-side storm—fueled by a triple whammy of inventory shortages, tariff expectations, and smelting bottlenecks—has pushed the cash premium structure in the copper market all the way to the June 2026 contract, completely reversing the contango seen six months ago.
The latest LME data shows registered inventories have plunged 80% this year, now equivalent to just one day of global consumption. A global scramble to ship copper to the U.S. ahead of potential import tariffs has exacerbated the drawdown.
Chinese smelters’ desperate hunger for raw materials is distorting price mechanisms. According to Benchmark Mineral Intelligence, spot copper concentrate treatment and refining charges (TC/RCs) have hit historic lows of $45 per ton and -4.5 cents per pound, meaning smelters must now pay miners to process ore. This “inverted” phenomenon highlights the structural imbalance between smelting overcapacity and ore supply shortages.
Despite LME’s recent control measures—requiring traders holding over 50% of inventories to lend back positions at a 0.5% premium—Monday’s key spread still breached $69, far exceeding the $49.73 cap.
The July contract on the COMEX dipped slightly by 0.2% to $4.83 per pound ($10,626 per ton), but the forward curve continues to steepen. Analysts warn that if inventories aren’t replenished promptly, industrial users could face even tougher procurement challenges. Goldman Sachs‘ latest report has raised its 2025 copper price forecast to $12,000 per ton, emphasizing that “Dr. Copper” is entering a supercycle.
