Copper Hits Record Highs Against Intuition: The U.S. "Siphoning" Global Inventories—How Is This Copper Hoardin

However, this latest record high carries a highly counterintuitive signal: global exchange inventories haven't vanished; they have simply become highly concentrated in the United States.

Data shows that while the U.S. accounts for only 6%–7% of global copper consumption, COMEX copper inventories now represent nearly 70% of total global exchange stocks. In other words, the vast majority of freely tradable copper has been "locked" in the U.S. Conversely, physical spot markets outside the U.S. are tightening continuously, with China's electrolytic copper spot inventory dropping to a year-to-date low of 97,600 tons.

This record high isn't just about a "shortage of copper"; it's because the flow of copper has been artificially distorted by tariff expectations. What looks like a "commodity bull market" on the surface is actually three intertwined forces: "mine supply tightness + U.S. tariff-driven front-loading + new AI/power grid demand." This is fundamentally different from a standard cyclical price rally.

1. The Immediate Trigger: U.S. Tariff Expectations Are "Moving" Copper to New York

The inventory structure is now severely misaligned:

COMEX reported inventories stand at ~696,000 tons. Under some metrics, U.S. exchange stocks account for nearly 70% of global visible inventories (another metric shows ~695,600 tons at COMEX vs. ~234,200 tons at LME as of Sept 4).

LME and SHFE inventories remain at multi-year lows, with China's electrolytic copper spot inventory hitting a year-to-date low of 97,600 tons.

Despite U.S. domestic consumption being only 6%–7% of the global total, its hoarded copper is estimated to exceed 1 million tons, enough to cover about seven months of demand.

The core issue isn't a "global lack of copper," but rather that "freely deliverable copper is locked inside the U.S." Tight physical supply, high backwardation in near-term contracts, and elevated canceled warrants outside the U.S. mean prices can only rise to attract remaining supply.

2. The Underlying Hard Constraint: Mine Supply Is Experiencing Historic Contraction

Without mine tightness, tariffs would just be sentiment.

3. New Demand: AI, Power Grids, and NEVs Are Steepening the Copper Demand Curve

Traditional sectors like real estate and air conditioning are resisting high copper prices, but emerging sectors are driving genuine incremental demand:

Data Centers:A single AI computing cabinet requires ~800–1,000 kg of copper for liquid cooling copper bars and piping. Institutions estimate global data center copper demand at 475,000–740,000 tons in 2026, potentially reaching 1.3 million tons by 2028.

Power Grid Upgrades:Transformers, UHV transmission, and distribution cables require rigid copper volumes. China’s upcoming "15th Five-Year Plan" investments in smart computing and power grids will further amplify copper intensity.

NEVs:Electric vehicles use several times more copper than ICE vehicles, compounded by the rollout of charging and battery-swapping networks.

This demand may not immediately drain inventories, but it alters capital's pricing of "long-term copper scarcity," providing upside imagination space for mine tightness and inventory relocation.

4. A-Share Strategy: Resource Stocks > Smelters > Pure Processors

On Sept 8, non-ferrous stocks rallied broadly, with Jiangxi Copper and Western Mining up over 5%, while Yunnan Copper, Zijin, Tongling, and CMOC followed. The Huaxia Non-Ferrous Metals ETF (516650) rose 1.81%, seeing net inflows of 33.55 million RMB over the past 10 days. However, internal divergence is greater than the index suggests:

Resource/High Self-Mining:Zijin, Western Mining, CMOC. Profit elasticity = Volume × Price × Self-sufficiency rate. These act as "copper price beta amplifiers."

Pure Smelters/Low Self-Sufficiency:Jiangxi, Yunnan Copper, Tongling. Some businesses rely on processing fees. When TCs are negative, costs are pressured. Stock prices are driven more by inventory revaluation and spot premiums, with weaker elasticity than miners.

Processors/Copper Foil/Copper Bars:Benefiting from AI liquid cooling and electronic copper foil price hikes, but high raw material costs are hard to pass through. Focus on specific order books rather than blindly buying based on copper prices.

ETFs/Indices:For those avoiding single-stock risk, Non-Ferrous Metals ETFs or niche resource ETFs offer a "Copper + Aluminum + Gold" portfolio to hedge against single-mine underperformance.

When copper hits record highs, ask: "How much self-mined copper does the company have? How much is hedged? Will smelting losses expand?" before chasing.

5. Behind Institutional Divergence: Macro Variables Will Determine the Direction

Current prices have already surpassed previous institutional forecasts.