Copper's Real Squeeze Is Outside the US

Roughly 70% of the world's visible copper stocks sit in Comex-approved warehouses in the United States. Reuters, in reporting carried by Kitco, says that concentration has created shortages elsewhere and fuelled a price surge despite a global surplus. The headline price tells you copper is dear. It does not tell you where the metal is missing.

Benchmark three-month copper on the London Metal Exchange was up 1.1% at $14,487.50 a metric ton as of 1700 GMT on Tuesday, Reuters reported via Mining.com. It touched $14,490.50 during the session, its strongest since October 16. A firmer dollar capped the gains. Behind the rally is a market in two halves: a stockpile in America and a squeeze in the rest of the world. Freeport-McMoRan's quarterly results, out the same day, show what that looks like from a producer's seat.

A hoard on one side of the Atlantic

Since the end of February last year, Comex copper stocks have climbed nearly 750% to more than 714,000 tons, Reuters reported via Kitco. Macquarie estimates that US stocks, on and off exchange, now total about 1.6 million tons. Trade Data Monitor figures show the US imported more than 1.62 million tons last year, up 80% from 2024. The US Geological Survey pegged domestic production at 1 million tons. Copper in LME warehouses in New Orleans and Baltimore has jumped 44% since mid-August to nearly 130,000 tons.

The trade was built on tariff fear. Comex prices reached record highs of $6.83 a lb, or $15,057 a ton, on September 22. The Comex-over-LME arbitrage hit a record peak above $3,000 a ton in July last year and is now about $310 a ton. Wood Mackenzie analyst Charles Cooper put the consequence plainly: "the arbitrage has collapsed, so the incentive to keep moving metal to the US is much weaker right now."

That matters because the next catalyst is a political deadline, not a mine. Macquarie analyst Alice Fox sees as most likely a scenario in which the January deadline passes without a decision, leaving the tariff question unresolved. Panmure Liberum's Tom Price was blunter about who profits from the stockpiling: "Only traders are making money."

Tight where the metal is needed

Outside America, the signals point the other way. The cash LME contract last traded at a $199.50-a-ton premium over the three-month forward, a marker of near-term tightness. Earlier in the session the premium hit $206. Shanghai Futures Exchange stocks fell more than 25% last week to 54,356 tons as Chinese smelters entered maintenance, according to Reuters via Business Recorder. China's Yangshan premium, a gauge of import appetite, stood at $188 a ton on Tuesday.

ING's Ewa Manthey said copper was finding support from rebounding AI stocks, with demand expected to benefit from AI infrastructure expansion while supply stays constrained, particularly in China. Her read on the floor: "That tightness should continue to provide a floor under prices". Sucden Financial framed the split in a note: "US inventory accumulation continues to limit the headline price, while tight ex-US availability and constrained concentrate supply preserve the underlying support"

Equities have not followed the metal one-for-one. COPX, the copper miners ETF, closed at $76.68 on Tuesday, advancing 3.89%, still below the $95.70 it logged at the end of February, per market data.

Freeport: price up, pounds down

Freeport shows the gap between price and volume. The world's largest publicly traded copper producer, as Reuters describes it, beat Wall Street estimates for third-quarter profit as higher copper prices offset lower output at Grasberg in Indonesia. Average LME prices rose 43% from a year earlier in the quarter. Freeport's average realized price rose about 40% to $6.54 per pound. Net income came in at $1.2 billion, a 74% jump.

Volume went the other way. Copper production fell 9% to 832 million recoverable pounds, largely on lower operating rates at Grasberg. A mud flow there last September killed seven workers and halted operations for nearly a month. Freeport expects operations to reach 80% of capacity by mid-2027 and to approach full capacity by the end of 2027.

Management is guiding to recovery. Freeport expects 2026 copper sales of about 3 billion pounds, rising to 3.7 billion pounds in 2027, according to Investing.com's earnings-call summary. Chief Financial Officer Maree Robertson said each $0.10 a pound move in copper can change annual EBITDA by about $390 million in 2027 and 2028. Costs are climbing too. Higher diesel and electricity added about $500 million in 2026, and 2027 capital spending is projected at $5.2 billion, with management attributing part of the increase to more mining equipment, including autonomous trucks. A decision on expanding Bagdad in Arizona is due in the fourth quarter. Chairman Richard Adkerson said: "Freeport's growth plans match up exceptionally well with accelerating requirements for copper."

Supply keeps tripping

Elsewhere, the mines themselves keep stumbling. Peru's Antamina, one of the country's biggest copper mines, suspended operations on Tuesday as a precaution after a worker died at its Yanacancha site, Reuters reported via Mining.com. A source close to the mine said there was no timetable for a restart. Peru is the world's third-largest copper producer, and Antamina's output fell 9% last year after another fatal accident. In northern Chile, workers at Codelco's Ministro Hales blocked access for about six hours on Monday over unpaid bonuses. Alberto Muñoz of the Federation of Copper Workers warned that protests could spread to Chuquicamata, Radomiro Tomic and Gabriela Mistral.

Our own ClaimWatch series runs only through May, so it offers nothing on how these price signals are shaping new claim-staking. What the live market does show is a rally that rests on scarcity in particular places and on a stockpile whose logic depends on a tariff decision that may not come. Freeport, hauling fewer pounds to a richer market, is the clearest case of price running ahead of volume.