Why Asia's Copper Has Vanished (and Where It Actually Went)

By Siam Sukkhee Trading Co., Ltd — 2026-07-05 — copper market Southeast Asia

I watched 51,000 tonnes of copper leave Asia in a single day. May 22, 2026. Trafigura did the pulling.

Largest warehouse withdrawal since 2013. Largest since the financial crisis, really. Over $700 million worth of metal, gone in one morning.

They didn't take it because anyone in Asia was desperate for supply. They took it because America had made the numbers work. A 50 percent Section 232 tariff on copper had flipped the entire geography upside down. COMEX futures—the American market—was trading at a huge premium to LME prices. The spread hit nearly $2,937 per tonne at its peak. When that kind of money sits on the table, traders with capital and logistics don't hesitate.

Mercuria had already figured this out.

Back in December 2025, they'd earmarked 40,000 tonnes from South Korea and Taiwan warehouses. Around $460 million. They were positioning early, reading the policy the way you'd read a balance sheet—coldly, specifically, ahead of the curve.

Two trading houses. Two massive pulls. That's more or less what explains the whole mess.

The numbers. LME Asian warehouses held 97,400 tonnes by early July 2026. February had roughly 271,000 tonnes. That's a 64 percent drop. American warehouses? COMEX went from 80,000 tonnes in February 2025 to 652,200 tonnes. Eightfold increase. The metal didn't evaporate. It migrated west. Freight and financing costs didn't matter when the spread was that fat.

What this actually means for us

Wire and cable manufacturers in Southeast Asia represent a $98 billion market. That's not theoretical. That's factories in Thailand, Vietnam, Taiwan, Indonesia—actual production lines that need copper every single day. And they need it available, now, at something like a reasonable price.

Actually, that's not quite right. They don't need it at a reasonable price. They need it period. The choice between expensive copper and no copper is not a difficult choice for someone running a factory.

Copper runs 60 to 70 percent of your raw material cost in standard power cable work. It's not a line item. It's the entire cost structure. When spot availability tightens—when cancelled warrants drop to 11,356 tonnes across all of Asia, most of that sitting in South Korea—you don't just face margin pressure. Your production schedule breaks.

Chinese smelters complicated things further.

They exported 172,000 tonnes in January-February 2026. Compare that to 49,000 tonnes in the same months a year earlier. 251 percent increase. Domestic demand in China was slowing, so they chased exports, some of it into LME warehouses that were already being drained. But here's the thing: Chinese imports of refined copper fell 25 percent in the same window. The mainland was pulling global supply to feed its own export machine, which meant the region wasn't even getting the cushion it might have otherwise.

Tighter. Tighter still.

Goldman Sachs raised their year-end copper forecast to $13,735 per tonne. Not a wild speculation. A structural call based on tariff-driven inventory hoarding. If copper hits that, Asian fabricators relying on spot purchases face a real problem. Not a margin squeeze. A business threat.

Here's what gets me about this: Section 232 duties run through December 2027. That's not a short-term adjustment. That's a calendar. Factories in Kaohsiung, Bangkok, Jakarta—they're not pricing for a quarter. They're pricing for 18 months of this.

The administration gets to point at 652,200 tonnes in American warehouses and call it supply security. The accounting works. What it doesn't capture is the 64 percent drawdown outside US borders, the thinner spot availability, the regional premiums that have nothing to do with market fundamentals.

That's what a blunt instrument does to a fungible commodity.

Tags: Trafigura, COMEX copper, Section 232, copper tariff arbitrage 2026, LME warehouse drain Asia, Asian copper spot market 2026