Traders draw down LME copper stocks as Chinese market tightens

me-metals: Traders including Trafigura Group and Mercuria Energy Group Ltd. are drawing down stocks of copper on the London Metal Exchange, as strong Chinese buying tightens the market for the bellwether metal despite fears of recession.

According to me-metals cited from mining.com, Trafigura was behind a major part of the just over 20,000 tons requested for withdrawal on Friday, according to people familiar with the matter who asked not to be named as the information isn’t public. The orders cut available inventories of copper on the LME in Asia to the lowest in a year.

Mercuria and other traders have also been taking delivery from the LME in recent months, the people said. Bloomberg previously reported that Mercuria had been a major buyer of copper on the exchange.

The withdrawals come amid growing signs of tightness in China: the Shanghai copper market is in the steepest backwardation in nearly two years and inventories on the exchange witnessed record drawdowns.

Traders say that Chinese copper buying has been strong in spite of concerns about the trade war with the US. At the same time, the threat of tariffs on American copper imports has spurred a rush to sh

ip copper to the US, draining stocks in the rest of the world.

Available, “on-warrant” LME stocks dropped to 108,725 tons as a result of Friday’s drawdown. That includes 66,700 tons in Europe, which traders say is almost all Russian material, for which there are fewer buyers.

Available LME copper stocks in Asian warehouses fell to 42,025 tons, the lowest since May 2024. Most of that was in Kaohsiung, the Taiwanese port that accounted for more than 80% of Friday’s requested drawdowns.

Mercuria’s head of metals Kostas Bintas told Bloomberg in March that the rush to ship metal to the US risked leaving the rest of the world perilously short of copper, and predicted that prices could hit record highs.

While prices plunged in the wake of Donald Trump’s tariff announcement on April 2, they have since rebounded. On Friday, benchmark LME copper prices rose as much as 2.7% to $9,485.50 a ton.

Spokespeople for Trafigura and Mercuria declined to comment.

“The LME monitors its markets closely and has the necessary controls in place to ensure continued market orderliness,” a spokesperson said.

source: mining.com