LME-registered copper stocks fell 0.83% in the latest reporting period, extending a four-week drawdown streak that has removed roughly 12% of exchange inventory since the end of May. Stocks are now at levels last seen in early Q1 2026, tightening the nearby spreads.
The drawdown corresponds with ICSG data showing a 42,000-tonne refined deficit in April 2026. Year-to-date through April, the refined market is in a cumulative deficit of 85,000 tonnes, reversing the small surplus recorded in the same period of 2025. Mine production constraints — particularly from Chile and Peru — are limiting refined output growth.
Chilean copper production fell 3.1% year-on-year in May, according to Cochilco data. Codelco’s output declined 5.2% as aging infrastructure at Chuquicamata and ore grade deterioration at El Teniente weighed on volumes. BHP’s Escondida held flat, but Anglo American’s Los Bronces dropped 8% due to water restrictions.
On the demand side, Chinese refined copper imports rose 6.5% year-on-year in May, absorbing a significant share of global supply. European demand was stable but cautious, with German industrial production showing modest improvement. US demand was mixed: construction wire orders picked up, but appliance manufacturing softened.
Cancelled warrants — metal earmarked for delivery — rose to 18% of total LME inventory, signaling that further drawdowns are likely. If the refined deficit persists at current levels through Q3, LME stocks could test the psychologically important 50,000-tonne level by September.
LME stock depletion plus a refined deficit create upward price pressure for Q3. Buyers should assess inventory coverage against this trajectory. The cancelled-warrant ratio at 18% suggests accelerated draws are imminent. For spot buyers, consider locking H2 volumes now; deferred buyers should watch the cash-to-three-month spread for backwardation signals.