CORRECTED-COMEX copper inventories surge, close to LME levels

By Ashitha Shivaprasad

May 23 (Reuters) - Copper inventories in COMEX-registered warehouses are approaching those held on the London Metal Exchange (LME) and may soon surpass them for the first time since 2022 as traders aim to profit from high prices in the U.S., which could impose tariffs on imports of the metal.

Inventories in warehouses owned by the U.S. COMEX exchange HG-STX-COMEX have surged to 174,607 short tons (158,400.8 metric tons), marking their highest level since 2018 with an 87% increase since the end of February.

In contrast, LME-registered warehouses MCUSTX-TOTAL have seen persistent outflows, with stocks falling to 164,725 metric tons, a 37% decline since the end of February.

This global reshuffling of copper inventories follows a directive by U.S. President Donald Trump in February to launch an investigation into possible tariffs on copper imports to rebuild U.S. production of copper critical to electric vehicles, power transmission and construction.

Currently, the premium on COMEX copper over the LME price, stands at $683 per ton. In March, this spread widened to a record $1,572 per ton, highlighting the growing divergence between the two markets.

"That price premium has attracted metal to the U.S., so it results in pressure and draws from other exchanges," said Alastair Munro at broker Marex.

Meanwhile, in the LME system, the spread between the cash against the three-month copper contract CMCU0-3 remains at a premium, indicating some tightness for the nearby supply due to the outflows.

The drawdown isn't limited to Western exchanges. China, the world’s top copper consumer, is also seeing inventory declines. Stocks in Shanghai Futures Exchange-monitored warehouses CU-STX-SGH fell 9% this week to 98,671 metric tons.