Prismo Metals Inc. (CSE:PRIZ)
A leadership team with a proven ability to explore, operate and develop precious metal discoveries.
The United States accounts for roughly 6% to 7% of global copper consumption, yet COMEX now holds close to 70% of combined copper inventories across the world’s three major futures exchanges, according to Ole Hansen, head of commodity strategy at Saxo Bank. He called the share unprecedented.
The immediate driver is tariff risk. The U.S. Commerce Department has recommended a phased duty on imported refined copper — 15% in 2027 rising to 30% in 2028. Seven weeks past its own deadline, the administration has not decided. Traders have stopped waiting because the calculation is simple: get metal inside the border before a duty lands and it becomes more valuable the moment it does.
“If you can get hold of copper, you want to ship it onshore into the U.S. just in case there is a tariff applied, because that would mean the value of your copper would go up,” Hansen said.
The other pull comes from Asia. Hansen said Chinese demand has picked up, with China at the forefront of the energy transition, keeping copper demand strong even as the housing market remains weak.
Hansen acknowledged the American stockpile could eventually flow back. If prices outside the U.S. rise enough, the arbitrage flips and metal leaves. But last year a large amount of copper entered the U.S. ahead of an announcement that was later postponed, and in the following months almost none left.
“There is a risk that all this copper that has moved stateside is becoming almost a stranded metal, and that will continue to keep the rest of the world tight,” he said.
LME data on Monday showed total copper inventories of 207,825 metric tons, of which 104,750 tons have been cancelled, with about 63% of the cancelled tonnage sitting in U.S. warehouses. Cash copper closed $535 per ton above the three-month contract, the widest since 2021. Hansen said the move reflects short covering more than outright shortage: “The big players are long gone. It could potentially just be a relatively small amount driving it.”
While LME intervened during similar spreads in 2021, Hansen does not expect a repeat. “Copper is the global benchmark,” he said.
Supply is not responding quickly either. BHP reported copper made up more than half of revenue for the first time, but output from its Chilean operations slipped as ore grades declined. Chile’s state copper commission expects the country’s production to fall 2.6% this year. Hansen said execution is slow: it takes years from discovery to first metal, miners have focused on consolidation rather than expansion, and ore grades are falling while energy and steel costs rise. BHP’s chief executive put the cost of building new copper at $16,000 to $30,000 per ton, while buying a company with existing copper runs well over $100,000 per ton after takeover premiums.
With supply unable to respond quickly, the extreme concentration of U.S. inventories may continue to keep the rest of the world tight.
