Copper prices have come under pressure after exchange inventories rose sharply. LME copper stocks increased to their highest level since September 2019, helped by inflows into Taiwan and Baltimore.
Total LME copper inventories rose by 18,775 tonnes to 330,375 tonnes. The rise in stocks points to softer physical demand.
Inventories have moved higher this year amid weaker demand in China. Shipments to the US have also slowed as tariffs dampen trade.
Speculative positioning has also weakened. Net bullish bets fell by 284 lots to 32,788 lots, the least bullish level since October 2023.
We are seeing copper prices face significant headwinds due to a sharp increase in exchange inventories. Total LME stocks have now reached 330,375 tonnes, a level not seen since September 2019, which signals a clear surplus in the physical market. This build-up suggests traders should consider bearish strategies in the coming weeks.
The inventory pile-up is largely driven by faltering demand from China, which consumes over half of the world’s copper. Recent data supports this, with China’s official manufacturing PMI for February 2026 coming in at 49.1, marking the fifth consecutive month of contraction and underscoring the ongoing weakness in its industrial and property sectors. This economic sluggishness means less copper is being pulled into the country, leaving more available on the global market.
Beyond China, we are also observing reduced shipments to the United States as trade tariffs continue to slow the flow of industrial metals. The latest US ISM Manufacturing PMI registered at 47.8, indicating continued contraction in the factory sector and dampening the outlook for industrial demand. This combination of weakness in the world’s two largest economies creates a challenging environment for prices.
We also note that speculative interest is waning, with net bullish positions falling to their lowest point since October 2023, suggesting conviction in higher prices is fading fast. As we saw looking back from our perspective in 2025, a similar dynamic of rising inventories throughout 2024 consistently capped price rallies and led to significant downward pressure. Derivative traders could therefore look at selling futures contracts or buying put options to position for potential further downside toward key support levels.
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