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Copper faces historic squeeze with LME stockpiles depleting fast
By Mark Burton
Bloomberg News
Monday, June 23, 2025
One of the copper market's biggest-ever squeezes is unfolding on the London Metal Exchange, as rapidly declining inventories push up spot prices.
Spot copper traded at a $280-a-ton premium to three-month futures today, hitting the highest level seen since a record spike in 2021. The huge spot premium -- known as a backwardation -- signals a supply shortage, and it comes after a rapid drawdown in LME inventories over the past few months.
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Stockpiles in the LME’s warehouses serve as a buffer for manufacturers during periods of strong demand, while holders of short positions can also use them to close out their contracts. Backwardations typically indicate the volume of stock in exchange warehouses is insufficient to meet their needs.
Readily available inventories on the LME have declined about 80% this year, and now equate to less than a day of global usage. The depletion has been fueled by a global race to move copper to the U.S. ahead of potential import levies, in a dynamic that’s left buyers elsewhere increasingly short of metal. ...
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