Copper prices are closing in on record levels as declining inventories in major trading hubs point to tightening supplies in the physical market. The red metal has risen for a sixth consecutive session, supported by strong Chinese buying, seasonal restocking and shrinking warehouse stocks.
The most-active December copper contract on the CME/COMEX climbed as much as 1.6% to $6.8710 per pound on Tuesday, September 22, moving close to its record settlement of $6.8885 per pound recorded on September 9. Three-month copper on the London Metal Exchange (LME) also advanced, reaching around $14,766 per tonne, less than 1% below its September 10 record of $14,875.
Shanghai inventories plunge
The supply situation in China has become a major driver of the rally. Copper stocks in Shanghai Futures Exchange warehouses have fallen about 70% since early June, while Shanghai copper cathode inventories declined to 43,900 tonnes, their lowest level since 2023, according to Shanghai Metals Market data.
A significant portion of imported copper is reportedly moving directly to fabricators instead of entering warehouses. Chinese manufacturers are also increasing purchases ahead of the upcoming Mid-Autumn Festival and National Day holidays, adding to near-term demand.
London market also shows signs of tightness
The LME is experiencing a similar squeeze in immediately available metal. Cash copper recently moved to a $62-per-tonne premium over the three-month contract, compared with an $86 discount just a week earlier. Such a market structure, known as backwardation, can indicate that buyers are placing a premium on prompt delivery.
Cancelled LME warrants—copper already earmarked for withdrawal—rose to 122,150 tonnes, representing about 48% of metal currently on warrant, leaving roughly 133,725 tonnes available to the market.
Supply disruptions add to market pressure
The rally is also being supported by concerns over mine supply. Output disruptions at major operations, including Grasberg in Indonesia and Kamoa-Kakula in the Democratic Republic of Congo, have reduced expectations for global copper production this year.
At the same time, copper remains strategically important for electricity grids, electric vehicles, renewable-energy infrastructure and AI data centres, keeping long-term demand expectations strong.
However, analysts have cautioned that the current tightness does not necessarily mean the world has run out of copper. A significant amount of metal has accumulated in U.S. COMEX warehouses, partly because traders have redirected supplies toward the United States amid uncertainty over potential tariffs. This has contributed to regional shortages even while substantial stocks remain elsewhere.
With Chinese inventories falling, LME availability tightening and supply disruptions continuing, copper is now trading close to its previous records. Market participants will be watching warehouse stocks, Chinese demand and U.S. trade-policy developments closely for clues about the next major move in prices.