TD Securities’ Daniel Ghali has highlighted a significant shift in the copper market, warning that copper will increasingly need to be drawn from exchange warehouses due to mounting global deficits [1]. Ghali notes that visible exchange inventories have jumped to approximately one-third of above-ground stocks, a marked increase from year-end 2023 when exchange inventories represented only 5% of global above-ground copper [1]. This change signals that exchange warehouses, previously considered a venue of last resort, are now playing a much more central role in meeting supply needs [1].
A large portion of the remaining 67% of above-ground copper stocks is now largely encumbered, with much of it tied up in China's Strategic Reserve Bureau, minimum working inventory levels, and landlocked US inventories [1]. This means that the unencumbered copper available for consumption is becoming increasingly scarce, and the global deficit will have to rely more heavily on visible warehouse stocks [1].
Ghali asserts that for years, copper traders could depend on abundant off-exchange inventories to address supply and demand imbalances, but this is no longer the case. The current situation reinforces TD Securities’ view that a copper crunch is looming, as the market faces tighter unencumbered days of consumption [1].
No specific market reactions, price movements, or analyst opinions beyond Ghali's warning are provided in the article [1].
CONCLUSION
TD Securities is signaling a high-impact shift in the copper market, with visible exchange inventories now representing a much larger share of available stocks. As global deficits bite and unencumbered copper becomes scarce, the risk of a supply crunch is rising. Market participants should prepare for tighter conditions and potential volatility in copper availability.