Copper ready to go away warehouses hits highest stage since 2021 | USAEMALL.com

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Copper waiting to leave warehouses has hit the highest level since 2021 as traders prepare to deliver the metal to the US before tariffs are imposed, according to LME data.

The volume of copper in the global LME warehouse network waiting to be shipped out climbed to 102,000 tonnes on Wednesday — the latest data — its highest level since late 2021.

Such a sharp jump from 10,000 tonnes on the previous Wednesday is unusual for copper stocks.

A similarly large increase was seen in the middle of 2021, when volumes of copper waiting to leave LME warehouses rose from 12,000 tonnes to more than 160,000 tonnes — but this was over several weeks.

Although the LME data does not specify where the metal is going, traders say some is likely to be heading to the US before tariffs are implemented.

The red metal, used in a broad range of applications including wiring and construction and vital for the clean energy transition, is among a number of minerals threatened with tariffs by Donald Trump.

The US president plans to introduce 25 per cent tariffs on all steel and aluminium imports on March 12. He has also ordered a probe into copper dumping in the US, laying the groundwork for tariffs on the metal.

The threat of levies has created distortions in metals markets as US importers have raced to build up stockpiles of aluminium.

Traders in the US have also been paying much higher prices for copper, aluminium and steel than their European counterparts.

The premium for benchmark New York Comex copper futures over the London price jumped to more than $1,000 a tonne this month, although by Friday that had fallen to about $600.

Chief executive of Chilean copper company Antofagasta, Iván Arriagada, said market distortions created “an arbitrage opportunity to move copper into inventories or stocks in the US” in a FT interview last month.

In addition, copper stocks in Comex warehouses in the US are at their highest levels since early 2019.

Copper futures prices on the LME slipped to the weakest level in two weeks on Friday, at roughly $9,300 a tonne, on concerns about trade wars undermining growth.

Copper waiting to be loaded out of LME warehouses was mostly located in facilities in Asia — South Korea, Taiwan and Singapore — and was “likely heading to the US”, said MUFG analyst Ehsan Khoman.

The build-up was “being caused by metal being shipped to the US before tariffs are implemented”, said base metals strategist Alastair Munro, of Marex.

The copper market has also been affected by sanctions. Much of the copper in LME warehouses is sanctioned Russian metal, or Chinese metal that only some US companies will buy.

“It’s going to be difficult if not impossible to move Russian and Chinese metal into the US,” said Marex analyst Edward Meir. However, trade flows could shift and the metal could be “shipped elsewhere, with Chilean metal instead being routed to the US”.

Copper in Comex warehouses is stored on a so-called “duty paid” basis, meaning all taxes must be paid before the metal enters the facilities. That means copper taken in before tariffs come into effect would not be hit by the levies.