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New York-based red metals industry analyst John Gross, author of The Copper Journal, has summarized the state of the global copper market as “dazed and confused” in a mid-August edition of that publication.
In his Aug. 15 report, Gross summarizes the rise and subsequent fall of the sizable difference between the price of copper on the United States-based Comex terminal market and the London Metal Exchange (LME) in the first seven and a half months of this year.
Gross says that situation has “come full circle,” with ending 2024 trading for about 6 cents per pound more than LME copper and as of mid-August exhibiting a similar differential.
In between, however, Comex copper spent January through July of this year soaring in value as copper traders and consumers prepared for what they thought would be a considerable tariff placed upon inbound copper in the U.S. by President Donald Trump.
Instead, at the end of July, the White House announced a tariff regimen that did not include any inbound duty on copper cathode.
Just before that announcement, the price of Comex copper had risen to more than $1 per pound higher than its LME counterpart, causing one of the widest price differential (or arbitrage) situations in trading exchange history.
Not portrayed in a pricing chart alone, Gross says, is “the relocation of inventories held in exchange warehouses” and by metals traders overall that was spurred by the price differential.
“Although copper held in Comex warehouses has risen nearly 158,000 metric tons this year, that figure is minor relative to total imports,” he says. “During the first six months, some 940,000 metric tons of cathodes were imported into the U.S. compared to 540,000 metric tons during all of 2024.”
The arbitrage situation likely was a factor in steady trading volumes on the LME copper contract this July.
According to the LME, the 167,501 lots traded using its copper contract last month marks a 5.2 percent increase compared with activity one year earlier.
From January through July, the more than 635,000 metric tons of copper traded on the LME outweighed activity for any other metal except aluminum, which saw more than 1 billion metric tons of contract trading activity in the same timeframe.
Copper trading volume on the LME in the first seven months of this year rose by 2.2 percent compared with around 621,300 metric tons of trading from January through July 2024.