Copper prices in London have surged to nearly $10,000 a ton as supplies dwindle and traders rush to ship metal to the US ahead of possible tariffs, according to the Financial Times. Stocks on the London Metal Exchange have hit their lowest since 2023, triggering market volatility and rare backwardation, where spot prices exceed futures. The LME has imposed new rules to curb risks as major trading houses compete for a limited supply, raising fears of a short squeeze and long-term shortages. They write:
The price of copper in London has climbed close to its highest level this year, as traders try to get their hands on dwindling supplies after a months-long rush to move metal to the US ahead of possible tariffs.
The benchmark London price rose to a more than three-month high of almost $10,000 a tonne on Wednesday. Copper stocks in the London Metal Exchange global network of warehouses have dropped to the lowest level since 2023. […]
“It’s a big change to the copper market because they’ve got deeper pockets,” said Marex’s Munro. This threatens to make shortages worse, he warned: “We’re talking in two years’ time about real deficits.”
Even if buyers do not ultimately request the physical metal, “those positions are real, and that can create tension in the market”, said Panmure Liberum’s Price.
Read more here.
