Copper spreads spike again – ING

Copper spreads spiked again on the LME on Thursday. Cash contracts trading at a premium of above $319/t to three-month futures, but still down from a historic high of $379/t seen on Monday. Meanwhile, LME’s tom/next spread surged to $98/t on Thursday – the highest on record, ING's commodity experts Ewa Manthey and Warren Patterson note.

Copper prices are likely to stay supported

"The tightness in the spreads has been driven by plunging LME stockpiles, which have now reached their lowest level since August 2023. Trump’s investigation into whether to impose import tariffs on Copper has seen LME on-warrant holdings plunging 80% this year. The race to get Copper to the US before tariffs are introduced has tightened markets elsewhere. Comex Copper futures continue to trade at a large premium to the LME and the SHFE, incentivising the shipment of the metal to the US."

"LME Copper prices also surged on Thursday, nearing $9,900/t. We believe Copper prices are likely to stay supported, at least for now, if the LME stocks withdrawals continue. However, US tariffs being implemented on Copper would be bearish for Copper prices, with the wave of Copper rushing to the US likely to stop, at least for a while. Consumers are likely to start to work through their inventories. This will also likely improve the availability of Copper ex-US and weigh on Copper prices."