US Siphoning Copper Could Trigger Global "Copper Shortage"? Unprecedented Scene Unfolding in Metal Markets

Cailian Press, March 24 (Editor: Xiao Xiang) - The US "siphoning" gold from the global market may not cause too much economic turbulence. However, when US traders recently began to aggressively stockpile and hoard the well-known "Dr. Copper," it raises concerns about whether an intense resource competition is about to unfold?

In a recent interview, noted copper trader Kostas Bintas said, "A large influx of copper into the US will cause severe supply shortages in other parts of the world, especially in the major copper-consuming countries. We believe something extraordinary is happening in the copper market."

Bintas, who was a copper trader at Trafigura Group and built the group's copper position to the largest in the world before leaving at the end of 2023, is now leading the Mercuria Energy team into this metal market.

He is once again predicting that copper prices will soar to record highs, up as much as one-third from current levels. As of last Friday, LME copper closed at $9,852/mt. Bintas said, "Is it reasonable to expect copper prices to reach $12,000 or $13,000 per ton? It's hard to give a specific number because this situation is unprecedented."

Notably, Bintas was among the first traders and investors to predict a multi-year bull market for copper after the pandemic, arguing that the growth in electrification demand for copper would outpace supply expansion.

At Mercuria, Bintas is working with another copper bull pioneer, former Goldman Sachs metals strategist Nick Snowdon, who predicted about a year ago that the average copper price in 2025 would reach $15,000 per ton.

US Copper Grab Causing Global Chaos

Cailian Press reported last week that there are signs that US ports will soon be overwhelmed by a surge in imported copper as traders rush to ship goods before potential tariffs by President Trump take effect. According to industry sources citing four people familiar with the shipments, between 100,000 and 150,000 mt of refined copper is expected to arrive in the US over the next few weeks. If all of it arrives in the same month, it could exceed the US record for the most monthly imports, which was 136,951 mt in January 2022.

It is understood that commodity traders, including Trafigura Group, Glencore Plc, and Gunvor Group, are rerouting large amounts of copper originally destined for Asia to the US. Some of these sources say that due to the large volume, traders are booking additional storage space in New Orleans and Baltimore to accommodate the cargo.

The tariff threat and the sudden surge in demand have also led to significantly higher copper prices in the US compared to other overseas markets. Last week, Comex copper futures were more than $1,400/mt higher than in other regions, creating a "huge incentive" for traders to ship every available ton of copper to the US.

Bintas commented, "In terms of profit per ton, this is the best arbitrage opportunity I've ever seen."

Bintas pointed out that the shift in inventory to the US means that the Chinese copper market will face a shortage. Chinese buyers, who account for more than half of global demand, will be forced to compete with the US market for resources. Meanwhile, the large amount of copper scrap that typically flows out of the US has largely dried up.

"Historically, China has successfully resisted high prices, but this is the first time in recent years that another market is taking resources away from China. This is the unknown," Bintas said.

According to Mercuria's estimates, about 500,000 mt of copper is currently flowing to the US, with most of it already en route, while the normal monthly import volume for the US is around 70,000 mt. Traders are seizing the price spread opportunity to profit and advancing planned shipments to avoid potential Trump tariffs. Mercuria itself has 85,000 to 90,000 mt of copper on its way to the US.

Bullish Sentiment on Copper Prices Grows

Signs indicate that Bintas' bullish view on copper prices is not an isolated case.

Exchange data shows that investment funds have pushed net long positions in LME copper to their highest level since May last year. Drakewood Capital Management CEO David Lilley predicts that the shift of copper to the US will put Chinese buyers in "much fiercer competition for metal."

Global copper prices have already experienced a significant rise so far this year, with LME copper up 12% since the start of the year. Driven by the tariff threat, Comex copper futures prices are approaching historical highs. While all predictions of soaring copper prices could be derailed if trade war-induced fears of a global economic slowdown materialize, Mercuria is not worried about this risk.

The firm forecasts that global copper demand will exceed supply by 320,000 mt this year, and with the shift in inventory to the US, inventories outside the US may see a significant drawdown.

Additionally, the tariff threat has led to a depletion of US copper scrap exports, which is crucial—about one-third of global copper production comes from scrap, and the flow of scrap often acts as a market buffer, rising when prices are high and falling when prices are low.

Mercuria's head of metals research, Snowdon, said that by February, US copper scrap exports had fallen to negligible levels. Even in the scrap sector, the global copper market is experiencing an underappreciated shock.

BHP CEO Mike Henry said at the China Development Forum last weekend that he expects a 10 million mt global copper supply deficit over the next decade. Over the ten years to 2034, copper mining will require $250 billion in growth capital expenditure, a significant increase from the $145 billion invested over the past 10 years, but so far, only a small portion of this investment has been committed.

Henry pointed out that, for example, the construction boom of hyperscale data centers globally, which will provide powerful computing support for AI development, will require a substantial amount of copper. By 2050, the demand for copper from data centers alone is expected to increase sixfold, from the current annual 500,000 mt to nearly 3 million mt per year.