Copper inventories rise on LME despite long-term supply deficit forecasts

London Metal Exchange (LME) copper inventories saw a significant increase in mid-August 2026, rising by approximately 18,600 tonnes over two trading sessions. This surge follows a period of 42 consecutive days of declining stockpiles, the longest such streak since 2014.

Despite this short-term inventory spike, analysts maintain a long-term outlook of structural supply deficits. The International Copper Study Group forecasts a 150,000-tonne deficit for 2026, while JP Morgan projects a larger shortfall of 330,000 tonnes. The International Energy Agency (IEA) further predicts a 25 per cent supply shortfall by 2035, driven by global shifts toward electrification, renewable energy, and data-center expansion.

Market risks remain balanced between supply and demand. Potential supply disruptions could stem from weak smelter margins or production cuts in China and the Democratic Republic of the Congo. On the demand side, US market activity may be influenced by tariff-related pre-emptive buying and potential changes to customs duties on refined copper.