Comex Copper Stocks Hit Record as Tariff Risk Pulls Cathodes Into US

Comex Copper

Comex copper stocks have climbed to a record as a wide price premium over the London Metal Exchange and potential US import tariffs attract refined copper cathodes into the country. Inventories reached nearly 588,000t on 9 June.

Comex copper stocks have risen in 38 of the past 40 trading days and now stand 241% above year-earlier levels. The rapid build reflects trade positioning rather than weak physical demand alone.

Comex copper stocks are being supported by a widening Comex-LME arbitrage that makes US deliveries increasingly attractive. Cathodes from Canada, Mexico, Chile, Peru and other suppliers are moving toward the higher-priced US market.

The possibility of a future 15% tariff on refined copper is adding another incentive to deliver metal before any new duty takes effect.

Comex-LME Arbitrage Redirects Global Cathode Flows

The spread between Comex and LME copper prices has widened since early April, creating profitable opportunities for traders able to move cathodes into the US.

The arbitrage must remain large enough to cover shipping, financing, insurance and other logistics costs. Once those expenses are covered, the higher US price provides a clear incentive to redirect material.

Imports accelerated further in May as the spread widened and continued to increase into June.

This is creating a fragmented global inventory picture. Copper may appear plentiful in US exchange warehouses while supply becomes tighter in other regions as cathodes are pulled toward Comex.

The development shows how financial pricing can quickly reshape physical trade flows. Exchange spreads are no longer simply market indicators; they can directly determine where refined metal is stored and consumed.

For copper buyers outside the US, sustained arbitrage could reduce locally available cathodes and strengthen regional premiums.

Tariff Risk Could Push Copper and Scrap Prices Higher

The Department of Commerce is expected to provide an update on the US copper market before the administration decides whether to impose a 15% tariff on refined copper imports from January 2027.

The US imports around half of its refined copper requirements, making any tariff highly significant for domestic pricing and industrial consumers.

If tariffs are confirmed, buyers may accelerate imports before implementation. Sellers would have an incentive to place cathodes into the US market while shipments remain tariff-free.

Once the tariff begins, foreign suppliers could redirect material toward other regions unless US premiums rise sufficiently to offset the additional cost.

Domestic cathodes would then become more valuable because they would avoid the import duty. This could widen the Comex premium further and increase the cost of copper for US manufacturers.

Higher cathode prices could also encourage consumers to substitute more copper scrap where technically possible. That would increase competition for secondary material and potentially tighten scrap availability.

The result could be a two-stage market reaction: record cathode inflows ahead of tariffs, followed by tighter imports and stronger domestic premiums after implementation.

The Metalnomist Commentary

Record Comex inventories should not be interpreted simply as copper oversupply. They increasingly reflect tariff positioning and arbitrage, creating the possibility that today's US stock build becomes tomorrow's regional supply distortion.