Copper inventories across the three major exchanges present a paradox: total visible stocks are at elevated levels, yet available metal is tightening and prices are at all-time highs. The explanation is a geographic dislocation that separates headline inventory numbers from physical availability. (FACT: JPMorgan, April 24, 2026) The United States is hoarding copper ahead of a potential import tariff decision expected by late June, while stocks outside the US are being drawn down.
LME-registered copper warehouses hold 391,900 tonnes as of May 22, but nearly 30% of that total — approximately 117,000 tonnes — has been cancelled or earmarked for delivery. (FACT: LME data via Reuters, May 22, 2026) More than half of these cancellations are in New Orleans, where Trafigura and other traders are withdrawing metal ahead of the US tariff decision. Available LME stocks fell to a 10-week low after 53,325 tonnes were cancelled in a single day. (FACT: Business Recorder, May 22, 2026) The bulk of remaining uncancelled metal is in Kaohsiung, Taiwan — distant from the physical delivery points that matter most to European and Asian buyers.
Comex-approved copper inventories tell the opposite story. Stocks stand at 574,864 tonnes, an increase of more than 550% since President Trump ordered a Section 232 investigation into copper imports in February 2025. (FACT: Reuters, May 22, 2026) The metal has flowed into the US from LME and SHFE warehouses as traders front-run a potential import levy on copper metal. This has created a two-tier market where Comex copper trades at a premium over the LME benchmark, reflecting both tariff expectations and the physical cost of repositioning metal across the Atlantic.
On the Shanghai Futures Exchange, copper inventories have also been rising, though for a different reason: Chinese demand has softened amid real estate weakness and industrial slowdown. (FACT: JPMorgan, April 24, 2026) SHFE stock levels are sufficient for domestic needs but do not alleviate the supply tightness in the LME system that sets the global benchmark price. The divergence between the three exchanges creates a situation where a buyer in Düsseldorf or Mumbai faces a different physical copper market than a buyer in Chicago or Shanghai.
JPMorgan flags the dislocation as a key risk for H2 2026: if the US tariff decision arrives and is less punitive than expected, the arbitrage that has pulled metal into the US could reverse rapidly, dumping Comex inventory onto the global market and compressing prices. But if tariffs are harsh, US-bound metal stays in the US, and the rest of the world faces tightening availability against a backdrop of already-low LME available stocks. Either scenario creates volatility, but neither resolves the fundamental problem: inventory is abundant only in the location where it is least needed.
The number that matters for your business: A European buyer relying on LME-priced cathode faces available stocks of roughly 275,000 tonnes (total LME minus cancelled) — equivalent to approximately 4 days of global copper consumption at current run rates. The apparent "surplus" in headline inventory numbers is an optical illusion created by the US tariff arbitrage. A 10% tariff on copper metal would widen the Comex-LME spread by roughly $1,300-1,400/t, meaning a European buyer's LME-linked contract is priced against a different physical reality than the US buyer's Comex-linked contract.
Action: European and Asian cathode buyers should secure Q3 volumes now — the available LME stock cushion is thinner than headline numbers suggest. US buyers face the opposite risk: if tariffs are less severe than expected, the Comex premium could collapse, making extended forward coverage at current levels costly. For buyers with multi-region exposure, the dislocation creates an arbitrage opportunity: pricing against LME for European/Asian delivery and Comex for US delivery, rather than blending into a single global benchmark.
Horizon: Act before June 25 (the expected tariff decision date). After that, the market reprices to reflect the tariff outcome and the dislocation either amplifies or reverses.
Trigger: Watch weekly LME cancellation data. If New Orleans cancellations exceed 60,000 tonnes before the tariff decision, the physical premium dislocation is deepening. Separately, watch the Comex-LME spread: a narrowing below $200/t signals the arbitrage is closing and metal could begin flowing out of the US.