The price of copper has surpassed $11,000 per ton, influenced by discussions at a copper industry conference in Shanghai. Various concerns have arisen, particularly about potential copper shortages and the impact of US tariff uncertainty, which might result in increased stockpiling at COMEX and the depletion of global stock.

The raw material shortage has affected smelter utilisation, dropping to a record-low of 75%. There’s a risk of further declines if supply issues persist, yet data doesn’t indicate a reduction in copper production. China’s metal production remains high, although plans to expand smelting capacities by 2 million tons have been halted.

LME stocks have risen from June lows, reaching their highest in nearly nine months, with an increase of about 100,000 tons. This rise suggests limited potential for copper prices to surge in the short term, despite the challenges facing the industry. The information reflects insights from expert observations and analyses.

With copper trading above $11,000 per ton as of late November 2025, the market is presenting conflicting signals that warrant caution. The narrative from the recent industry conference in Shanghai points to a long-term supply crunch, yet short-term data shows a build in available metal. We believe this creates a complex environment for traders in the coming weeks.

The bullish case is centered on supply constraints, particularly in the United States. Uncertainty around potential US tariffs, with a decision expected in early 2026, is driving stockpiling at COMEX warehouses and pushing the premium for US copper higher. The COMEX-LME arbitrage, which we saw widen dramatically during the supply chain disruptions of 2022, has crept up to over $250 per ton in recent weeks.

This is compounded by a global shortage of copper concentrate, the raw material for smelters, which is expected to be undersupplied by 500,000 tons next year. We’ve seen Codelco, Chile’s state-owned miner, downgrade its 2025 production forecast twice this year, citing declining ore grades, reminiscent of the challenges faced back in 2023. These factors have pushed global smelter utilization down to a record low of 75%.

However, we must weigh this against the immediate physical market reality. Available LME registered copper stocks now stand at approximately 165,000 tonnes, a significant recovery from the sub-65,000 tonne levels we observed in June 2025. This inventory build suggests that for now, there is enough refined metal to meet current demand.

Furthermore, China’s high production levels are defying the concentrate shortage, with refined copper output for October 2025 hitting a record 998,000 tonnes by using more scrap. While China has reportedly suspended plans for 2 million tons of new smelting capacity, this is a longer-term issue. The latest Global Manufacturing PMI released in early November 2025 also slipped back to 49.8, indicating a slight contraction and raising questions about near-term industrial demand.

Given these conflicting signals, we see an opportunity in options markets where implied volatility has risen. Selling out-of-the-money call options for January 2026 expiration could be a prudent way to collect premium, betting that rising LME inventories and soft manufacturing data will cap any significant price surge before year-end. This strategy benefits from the market’s indecision and time decay.

Another approach is to use calendar spreads to play the disconnect between short-term weakness and long-term tightness. Buying a deferred-month contract like March 2026 and simultaneously selling the front-month contract could capture the potential upside from the structural concentrate shortage. This structure profits if the market remains range-bound in the near term but rallies later, reflecting the core tension we are observing.