Copper traded on the US Comex exchange is expected to maintain its price premium over the London Metal Exchange (LME) for at least a year and a half, according to comments delivered Thursday by Robin Martin, head of market development at the LME. Speaking at the World Copper Conference Asia, Martin said the gap between the two benchmarks has become a structural feature of the market and is unlikely to close in the near term.
Martin noted that copper prices on the Comex have consistently traded 2% to 3% above LME levels. He attributed the divergence largely to uncertainty over copper tariffs in the United States, which he said has prompted a shift in how physical metal is stored and priced across exchanges. “There is a persistent premium on the CME contract of 2 to 3% and I do think it is fair to say this is likely now a structural difference in the markets that is likely to persist,” he said.
The price spread has been accompanied by a movement of inventories away from the LME system. Stocks have migrated in large volume to US warehouses, where exchange inventories recently exceeded 400,000 short tons. The build in Comex sheds contrasts with declining levels in LME storage, reflecting changing trading dynamics linked to tariffs and exposure to the US market.
Alongside commentary on pricing trends, Martin outlined steps the LME is taking to broaden access for Chinese market participants. These efforts include making offshore yuan acceptable as collateral and working with major banks in China to ease the process of participation for domestic institutions. He said the exchange is actively pursuing these initiatives as part of a plan to increase engagement with Chinese users.
Martin also said the LME is exploring the potential inclusion of Chinese government bonds as eligible collateral within its clearinghouse. The addition of such instruments would expand the range of financial assets accepted by the exchange and could further integrate Chinese counterparts into LME trading and clearing.
His comments suggest multiple changes in the copper market, one involving the pricing relationship between the US and London benchmarks, and another tied to access and collateral mechanisms aimed at improving participation from China. Both developments indicate evolving structural trends that are influencing trading behavior, inventory distribution, and exchange policy across the global copper trade.
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