The 590,000-Ton Secret: Why The US Built A 30-Year Copper Fortress

Core Insights - The U.S. is stockpiling copper, with 590,000 short tons in storage, the highest level in over 30 years, as a strategic response to trade tensions rather than increased mining activity [1] - Copper inventories have surged nearly 300% in the past year, surpassing the combined stocks of the LME and Shanghai exchanges, indicating a significant shift in market dynamics [2] - Traders are preemptively moving copper into the U.S. to avoid impending tariffs of 15%–25% on refined copper, leading to a local surplus while global supplies tighten [3] Market Dynamics - The current copper stockpile may be misleading, as it exists in a structurally tight market, and once tariff uncertainties are resolved, a significant amount of this inventory could be released, potentially causing a price dip [4] - Chamath Palihapitiya views copper as a critical trade for 2026, predicting that AI demand could require 50,000 tons per data center, while supply will take over 20 years to scale, suggesting a long-term structural shortage [5] - The anticipated demand surge driven by AI and electrification could lead to a significant imbalance in the copper market, with the current inventory being a temporary phenomenon [7] Investment Implications - Short-term, the U.S. faces a copper glut due to tariff fears, while long-term projections indicate a potential famine in supply driven by technological advancements [7] - Investors are advised to consider copper and copper-miner ETFs as a means to capitalize on these market trends without holding physical metal [5]