The LME copper spot premium reached $478 per ton over the three-month contract, its widest level since the 2021 supply squeeze. LME inventories have declined for 42 consecutive days, while almost half of the remaining copper is already scheduled for withdrawal. Copper shortages could raise construction and expansion costs for Bitcoin miners, particularly for cabling, transformers, substations and grid connections.
Copper's steepest supply squeeze since 2021 is sending a warning across two electricity-hungry industries: Bitcoin mining and artificial intelligence. The London Metal Exchange's cash copper contract traded as much as $478 per ton above the three-month contract on Monday. Such backwardation signals that buyers are paying unusually high premiums for immediately available metal.
The move followed a $370-per-ton front-month premium on Friday and came as LME inventories declined for a 42nd consecutive day, the longest withdrawal streak since 2014. Stockpiles fell to 204,975 tons, with almost half already earmarked for removal. Copper prices have consequently gained nearly 16% this year, with the three-month contract reaching $14,360.50 per ton and approaching January's record of $14,527.50.
The squeeze reflects both falling production and a geographic scramble for available copper. Expectations that the United States could impose tariffs on refined copper have lifted American prices above LME benchmarks. That gap creates an arbitrage opportunity, encouraging traders and producers to redirect metal toward the US instead of delivering it into LME warehouses.
The result is an increasingly severe shortage of exchange-deliverable copper elsewhere, particularly in Europe. Production has also disappointed. Jefferies' latest tracker, covering miners responsible for roughly 55% of global supply, showed second-quarter output falling 3.9% year over year to 3.113 million tons.
Ivanhoe Mines recorded a 43% decline following disruption at Kamoa-Kakula, while Newmont's production dropped 53% amid lower ore grades. Freeport-McMoRan, Antofagasta and BHP also reported declines. Jefferies expects the copper market to record a 442,000-ton deficit in 2026, widening to 782,000 tons by 2030.
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