The price of copper has exceeded $11,000 per ton, largely due to discussions at a copper industry conference in Shanghai. There are worries about possible copper shortages and ongoing uncertainty surrounding U.S. tariffs. This uncertainty could lead to higher stockpiling at COMEX and a decrease in global copper supplies. Currently, smelters are operating at a record-low capacity of 75% because of the raw material shortage. If these supply problems continue, capacity could fall even more, but so far, copper production levels have not decreased. China’s metal production is still strong, but plans to increase smelting capacities by 2 million tons have been paused. LME stock levels have improved since June, rising nearly 100,000 tons, reaching their highest point in almost nine months. This increase makes it less likely for copper prices to jump in the short term despite the industry’s challenges. Experts have shared their insights on this situation. As of late November 2025, copper prices above $11,000 per ton indicate conflicting market signals, urging caution. The conference in Shanghai highlighted concerns about a long-term supply issue, yet short-term data shows an increase in available copper. This presents a complicated scenario for traders in the upcoming weeks. The optimistic outlook focuses on supply issues, especially in the U.S. Concerns regarding potential U.S. tariffs, with a decision anticipated in early 2026, are causing stockpiles to grow at COMEX warehouses and increasing the price premium for U.S. copper. The arbitrage between COMEX and LME has widened to over $250 per ton recently, reminiscent of the significant changes during the supply chain challenges of 2022. Adding to this issue is a global shortage of copper concentrate, the essential raw material for smelting, which is expected to be short by 500,000 tons next year. Codelco, Chile’s state-owned mining company, has lowered its production forecast for 2025 twice this year, citing declining ore grades, similar to challenges seen back in 2023. This has led to global smelter utilization dropping to a record low of 75%. However, we need to consider the current physical market situation. Available LME registered copper stocks are now about 165,000 tonnes, a significant recovery from below 65,000 tonnes in June 2025. This increase suggests that there is currently enough refined metal to meet demand. On top of that, high production levels in China are counteracting the concentrate shortage. In October 2025, refined copper output hit a record 998,000 tonnes, thanks to increased use of scrap metal. Although China has put plans for 2 million tons of new smelting capacity on hold, this is a long-term concern. Additionally, the latest Global Manufacturing PMI, released in early November 2025, fell to 49.8, indicating slight contraction and raising doubts about immediate industrial demand. Given these mixed signals, there’s a potential opportunity in the options market where implied volatility has increased. Selling out-of-the-money call options set to expire in January 2026 could be a smart way to earn premium, as it bets that rising LME inventories and weak manufacturing data will limit any significant price hikes before the year ends. This strategy benefits from market uncertainty and time decay. Another strategy could involve calendar spreads, exploiting the gap between short-term weakness and long-term tightening. Buying a March 2026 contract while selling the front-month contract could capture the potential upside from the ongoing concentrate shortage. This approach profits if the market remains stable in the near term but rises later, reflecting the tension we are currently observing.

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