Economy: Copper Hits New Record!

Strike while the iron is hot, copper version. This is somewhat what traders have been doing for the past few weeks. Copper set a new record on Tuesday, September 9, at $14,674 per ton on the London Metal Exchange. The session shows an increase of 1.1%. The previous day's record is already falling. For the year, the industrial metal is up 18%. This surge is due to an escalating physical shortage and fears of new U.S. tariffs on imports. An industrial cousin of gold and bitcoin in the race for rare assets, except this one is weighed in tons and stored in warehouses rather than in a wallet.

Key points of this article:

• Copper has reached a new historical record on the London Metal Exchange, driven by a growing physical shortage and fears of U.S. tariffs.
• Copper stocks in the United States have reached record levels, while reserves in other regions have drastically decreased, exacerbating global tension.

Two markets for one metal. At the end of August, Comex stocks in New York peaked at 675,185 tons after 46 consecutive sessions of increases. LME reserves in London have fallen by nearly 40% since the end of May, while stocks on the Shanghai Exchange have melted by 85% since their mid-March peak.

As a result, American importers brought in 885,000 tons of refined copper cathodes in the first half of the year, double their imports during the same period in 2024. In July alone, 225,094 tons of copper landed on American soil: an absolute monthly record. Physical copper continues to flow into the United States, exacerbating tension in markets outside the U.S., summarizes an analyst from Everbright Futures quoted by Business Recorder.

Moreover, the market anticipates an expansion of U.S. tariffs on refined copper as early as next year, and importers are not waiting for the decision to act. The futures curve has shifted into backwardation (immediate delivery copper costs more than copper delivered in six months), a sign that immediate availability is worth its weight in gold.

Additionally, global mining production is no longer keeping pace: analysts expect the first annual decline in extraction since 2017. And the gap has just widened suddenly. Indeed, Grasberg, in Indonesia, is the second-largest copper mine in the world. It was hit on September 8 by a mudslide that trapped workers underground, forcing operator Freeport-McMoRan to declare force majeure. Goldman Sachs estimates the total production loss at 525,000 tons, according to data relayed by Yahoo Finance, enough to shift its global balance for 2025 from a surplus of 105,000 tons to a deficit of 55,500 tons.

The appetite of artificial intelligence already exceeds forecasts for copper. Just over a year ago, Goldman Sachs aimed for $10,750 per ton by 2027. The market has already doubled down, with eighteen months ahead of its own timeline.

Why such a gap? Because structural demand is no longer coming solely from electrical cables and construction. Data centers for artificial intelligence and the great wave of electrification, from transportation to networks, are driving demand upwards at the very moment when mining supply is stalling. Even State Grid, the Chinese public electricity operator, is placing orders that local brokers consider solid. However, this surge remains primarily a phenomenon of stocks and tariff anticipation, not yet definitive proof of a structural shift in demand. But copper is already ticking almost all the boxes of a prolonged shortage.

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