Copper prices have declined as London Metal Exchange (LME) inventories surged to a 16-month high, indicating that supply is currently outpacing demand, according to ING strategists Warren Patterson and Ewa Manthey [1]. On Thursday, LME copper prices fell approximately 1.2%, settling near $12,900 per tonne, while LME-tracked stocks increased by almost 8% in a single day [1]. This inventory build is attributed to strong inflows into LME warehouses, which are being driven by shifting regional pricing incentives between LME and Comex. The LME copper premium over Comex has narrowed, reversing last year's structure that previously encouraged metal flows into US warehouses [1].
As these pricing signals normalize, copper is increasingly being redirected back into global exchange stocks, further contributing to the inventory surge [1]. ING strategists warn that continued increases in LME stocks could create a tougher near-term backdrop for copper prices, leaving the metal vulnerable to further consolidation unless Chinese restocking emerges [1].
Key factors to monitor include the pace of LME stock builds, the evolution of LME–Comex spreads, and any signs of restocking from China once price pressures ease. These elements will determine whether copper prices can stabilize or remain susceptible to further declines [1].
CONCLUSION
Copper prices have softened due to a sharp rise in LME inventories, reflecting supply outpacing demand and shifting regional pricing incentives. Unless Chinese restocking materializes or inventory builds slow, copper remains vulnerable to further price consolidation in the near term.