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Copper prices in New York vaulted to a fresh record on Wednesday, with the most-active Comex September contract touching $6.7045 per pound, or $14,781 a tonne. The advance eclipsed the previous intraday peak set in mid-May and extended the metal’s rally this year to approximately 17%. On the London Metal Exchange, prices climbed past $14,000 a tonne to reach $14,050, moving within striking distance of January’s all-time high of $14,500.
At the heart of the rally is a frantic pull of physical copper into the United States. With the Commerce Department already more than a month past its deadline to rule on phased import tariffs for refined copper, traders have been racing to lock in arbitrage profits. “The tariff arbitrage is ruling the roost over demand growth,” said Michael Cuoco, head of metals at StoneX Financial. More than 200,000 tonnes of copper arrived at US ports in July alone, the heaviest monthly inflow since IHS Markit records began in 2014.
The stockpile build has been extraordinary. Comex inventories have surged over 40% this year to all-time highs, and when private port storage is included, the total US hoard is now estimated well above 1 million tonnes. The immense physical appetite has stretched the New York premium over London to roughly $640 per tonne, sharply above July’s average of more than $350. Simultaneously, the LME market has flipped into backwardation, with cash copper commanding a premium above $100 over the three-month contract — the widest since January — signalling immediate scarcity.
Supply-side pressures are compounding the squeeze. The prolonged closure of the Strait of Hormuz has severed about half of the seaborne sulphur shipments from the Persian Gulf. Coupled with China’s ban on sulphuric acid exports running through December, roughly a quarter of global acid supply has been erased. The acid is a critical input for the SX-EW process that accounts for more than 15% of world copper production. Mines in the Democratic Republic of Congo, which produces around 1.5 million tonnes a year via this method, and Chile, at roughly 1.2 million tonnes, are now down to just 30 to 60 days of acid inventory.
A further blow came from Chile, where state-owned Codelco suspended the Andes Norte expansion at the El Teniente mine, the globe’s largest underground copper operation. The company cited “an emerging seismic phenomenon with characteristics different from the risks that have historically been known.” With output now locked in at around 300,000 tonnes annually, Chairman Bernardo Fontaine said there is “no possibility” of achieving the 1.7 million tonne yearly target within the next four to five years. The cascade of supply setbacks has sharply intensified fears of a deepening market deficit.
Macroeconomic sentiment offered an additional lift. The United States, Iran and Oman are preparing a 60-day shipping arrangement for the Strait of Hormuz, and President Trump told reporters a deal “could happen. Tomorrow or the next day.” Hopes for a reopening of the waterway boosted risk assets broadly, easing inflation fears and leading traders to pare wagers on further Federal Reserve rate hikes — a supportive turn for growth-sensitive copper.
Beneath the immediate price explosion lies a profound structural imbalance.
Veteran metallurgist Phillip Mackey noted that after a 25-year build-out, China now smelts roughly 60% of the world’s copper, producing 12–13 million tonnes of refined metal a year across some 45 smelters — what he called “the Saudi Arabia of copper smelting.” Over the same period, the US shrank its smelting fleet from roughly a dozen facilities to just two, and treatment charges have collapsed to near zero as Chinese capacity overwhelmed concentrate supply. Rebuilding Western smelting capability would require billions of dollars and close to a decade per project, and Mackey warned that political will and capital remain uncertain. That processing dependency keeps the copper supply chain in a state of structural tension, ready to snap upward on any new disruption.
