Copper: Tight Inventories Sustain Price Support – ING

ING analysts Warren Patterson and Ewa Manthey said in their latest report that London Metal Exchange (LME) copper prices continue to trade near multi-year highs, supported by tight inventories and strong inflows into the U.S. market. Lead: With spot market supply continuing to tighten, copper's short-term fundamental backdrop remains firm.

**Inventories and Spreads Highlight Spot Tightness**

According to ING analysts, LME copper available inventories have ticked up slightly recently but remain near multi-month lows. Meanwhile, spot premium indicators have widened sharply, with the LME copper cash-to-three-month spread climbing to a premium of approximately $545 per ton at one point—a rare level for the market—directly reflecting the scarcity of metal for prompt delivery. Analysts attribute this to large volumes of metal being diverted to the U.S. ahead of potential tariff implementation, which has persistently tightened supply in other regions.

**Tariff Expectations Reshape Global Copper Flows**

Market reports indicate that traders are accelerating shipments of copper to the U.S. to avoid potential import tariffs on refined copper. This behavior has not only created sustained logistical strain but has also kept the COMEX copper premium over LME at around $400 per ton. ING analysts believe that this tariff-driven stockpiling behavior, combined with Chinese buyers stepping in to purchase at lower levels, has jointly tightened physical supply in Asian and European markets.

**Demand Side Provides Structural Support**

Despite macroeconomic uncertainty, copper demand has shown resilience. ING's report states that copper demand related to electrification, data center expansion, and grid investment remains stable, providing solid bottom-line support for prices. Analysts also cautioned that any new developments in U.S. tariff policy could trigger heightened short-term price volatility, but the tight spot market landscape will remain the core anchor driving price direction for the foreseeable future.