Copper: Bull Market or Shell Game?

If you’ve been following the headlines, you’d think copper was in short supply. LME inventories are scraping the bottom. Prices are strong. And the usual voices are already calling for new heights.

So why does it feel like something’s missing?

U.S. housing starts recently hit a five-year low. EV sales, the supposed future of copper demand, haven’t done much of anything lately as gasoline prices keep slipping. China, which was supposed to bounce back by now, still hasn’t found its footing. So, where’s all this copper going?

Here’s my take.

Yes, LME stocks are low. But that doesn’t mean copper is gone. It just means it’s parked elsewhere. COMEX inventories, for example, have more than doubled since the start of the year. Doesn’t exactly describe a global shortage.

Meanwhile, production is doing just fine. Chile’s copper revenue was up 18% year over year in June. Prices paid rose 11% over the same stretch. And it’s not just Chile. Peru, the U.S., China, the DRC, all five of the world’s top producers are cranking out metal. And at these prices, they’re hedging aggressively.

For producers, this market is a gift. Lock in high prices, bank the margin, reinvest in future capacity. The copper shortage story sounds great until you look under the hood.

And now, the latest twist from the Trump Administration slapping a 50% tariff on copper imports into the U.S after concluding a national security assessment. That news sent Copper prices flying higher, with the December contract tagging a fresh all-time high just shy of $6.00, hitting $5.95.

In anticipation of the possibility of tariffs, copper imports through April 2025 were double that from a year ago and tripled from 2023 from the same period. That would explain why those COMEX stocks have risen so quickly this year. In fact, through April, the U.S. had already imported more than half of the expected needs for copper this year. The end game will be something to watch.

Domestic manufacturers, already tight on margins, will now be paying up whether they like it or not after August 1. In theory, that should push U.S. prices higher. But how much more will they need the red metal? Especially in a slowing economy. If anything, the tariff might stall orders more than it spurs them. And current stocks will still be used.

Oh, and we haven’t mentioned the expected global surplus for 2025 and 2026.

Could copper go higher? Sure. But when you’ve got high supply, soft demand, and now artificial price floors being set by trade policy, it starts to feel less like a bull market and more like a shell game.

Traders love this setup. It’s volatile, headline-friendly, and just uncertain enough to keep premiums inflated.

And if copper keeps grabbing headlines, it is even better.

Copper: Bull Market or Shell Game?

If you’ve been following the headlines, you’d think copper was in short supply. LME inventories are scraping the bottom. Prices are strong. And the usual voices are already calling for new heights.

So why does it feel like something’s missing?

U.S. housing starts recently hit a five-year low. EV sales, the supposed future of copper demand, haven’t done much of anything lately as gasoline prices keep slipping. China, which was supposed to bounce back by now, still hasn’t found its footing. So, where’s all this copper going?

Here’s my take.

Yes, LME stocks are low. But that doesn’t mean copper is gone. It just means it’s parked elsewhere. COMEX inventories, for example, have more than doubled since the start of the year. Doesn’t exactly describe a global shortage.

Meanwhile, production is doing just fine. Chile’s copper revenue was up 18% year over year in June. Prices paid rose 11% over the same stretch. And it’s not just Chile. Peru, the U.S., China, the DRC, all five of the world’s top producers are cranking out metal. And at these prices, they’re hedging aggressively.

For producers, this market is a gift. Lock in high prices, bank the margin, reinvest in future capacity. The copper shortage story sounds great until you look under the hood.

And now, the latest twist from the Trump Administration slapping a 50% tariff on copper imports into the U.S after concluding a national security assessment. That news sent Copper prices flying higher, with the December contract tagging a fresh all-time high just shy of $6.00, hitting $5.95.

In anticipation of the possibility of tariffs, copper imports through April 2025 were double that from a year ago and tripled from 2023 from the same period. That would explain why those COMEX stocks have risen so quickly this year. In fact, through April, the U.S. had already imported more than half of the expected needs for copper this year. The end game will be something to watch.

Domestic manufacturers, already tight on margins, will now be paying up whether they like it or not after August 1. In theory, that should push U.S. prices higher. But how much more will they need the red metal? Especially in a slowing economy. If anything, the tariff might stall orders more than it spurs them. And current stocks will still be used.

Oh, and we haven’t mentioned the expected global surplus for 2025 and 2026.

Could copper go higher? Sure. But when you’ve got high supply, soft demand, and now artificial price floors being set by trade policy, it starts to feel less like a bull market and more like a shell game.

Traders love this setup. It’s volatile, headline-friendly, and just uncertain enough to keep premiums inflated.

And if copper keeps grabbing headlines, it is even better.