Copper inventory structure is improving, US tariff front-running continues to push up US inventories, and J.P. Morgan remains positive on most copper mining stocks

Overview

This is a dashboard-style J.P. Morgan research report on the global copper market and copper mining companies, focusing on global inventories, the distribution of US versus ex-US inventories, tariff front-running, prices, arbitrage windows, supply and demand, regional production, cost curves, and valuations of major copper mining stocks. The core conclusion is that although the refined copper market is in surplus by more than 500kmt in 2025, US tariff expectations have changed the geographic distribution of inventories, tightening tradable inventories outside the US, thereby raising the floor for copper prices and supporting valuations for most copper mining companies.

Core views

The report argues that current copper price resilience does not come entirely from the traditional supply-demand balance, but more from an inventory tug-of-war between the US and China. Since the start of 2025, the US has attracted copper inflows through attractive COMEX/LME arbitrage, building inventories of about 1.2mmt over 18 months, compressing available inventories outside the US and forcing China’s buy-the-dip floor higher to around $13,500/mt. The team expects the US may impose phased Section 232 tariffs on refined copper cathode imports, potentially starting at 15% from January 2027 and rising to 30% in January 2028, which could further raise both the floor and upper range for copper prices and create risk of a move toward $15,000/mt.

Analysis framework

The report uses a combined approach of high-frequency inventories, exchange warrants, cross-market arbitrage, regional supply and demand, mine output, cost curves, company valuation, and rating comparisons. The inventory section distinguishes visible global inventories, US inventories, and available inventories outside the US; the price section tracks LME, COMEX, SHFE, spot premiums, forward curves, and speculative positioning; the equity section compares ratings, target prices, upside, EV/EBITDA, PE, dividend yield, and leverage across covered companies.

Methodology notes

• commodity_market_dashboardInventory-price linkage framework

  Assess the tightness of available copper supply through exchange inventories, bonded warehouse inventories, the share of US inventories, cancelled warrants, and spot premiums.

  The focus of this framework is not only the total level of global inventories, but whether inventories are locked up by tariff walls or regional arbitrage. Rising US inventories do not necessarily mean the global copper market is loose, because tradable inventories outside the US may be tightening at the same time.

• equity_valuationMining company valuation comparison

  Compare the relative attractiveness of copper mining stocks using ratings, target prices, upside, EV/EBITDA, PE, dividend yield, and net debt/EBITDA.

  The report maps its copper price view onto covered companies, favoring those with clearer copper production growth, free cash flow, and ROCE improvement, while avoiding names with higher cost and business mix risks.

• policy_riskSection 232 tariff scenario

  Use the path of US copper import tariffs to judge inventory flows, arbitrage behavior, and tail risks to copper prices.

  The report believes the key catalyst in 2H26 is more policy than traditional supply-demand balance; tariff certainty or higher tariffs could both affect the pace of continued inventory accumulation or destocking in the US.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• BHP AU

  Covered copper mining stock, rated Overweight by J.P. Morgan.

  Strengths

  Large diversified mining company; in the table, target price is 66.0, local share price is 57.7, and upside is 14%.

  Weaknesses

  Not a pure copper name, with copper exposure diluted by a diversified commodity portfolio.

  Comparison

  Part of the preferred Australia basket alongside RIO AU, S32 AU, CSC AU, and SFR AU.

  Risks

  Copper price declines, rising costs, and volatility in non-copper businesses such as iron ore.

• RIO AU

  Covered copper mining stock, rated Overweight by J.P. Morgan.

  Strengths

  In the table, target price is 209.0, local share price is 159.1, and upside is 31%.

  Weaknesses

  Its diversified mining structure provides less copper price leverage than pure copper companies.

  Comparison

  RIO AU is Overweight while RIO LN is Neutral, showing differences in valuation and investment framing across listed entities.

  Risks

  Global mining cycle, project execution, and non-copper commodity price volatility.

• FCX US

  Top North American copper mining pick, rated Overweight by J.P. Morgan.

  Strengths

  In the table, target price is 77.0, share price is 58.4, and upside is 32%, with strong leverage to rising copper prices.

  Weaknesses

  Valuation is not low, with 2026E EV/EBITDA at 8.7x.

  Comparison

  Compared with Neutral-rated TECK/B CN and Underweight-rated SCCO US, Freeport is the more preferred North American copper exposure.

  Risks

  Copper price volatility, mine operations, policy, and cost risks.

• ANTO LN

  EMEA copper mining stock, upgraded to Overweight by J.P. Morgan.

  Strengths

  The report highlights about 30% copper production growth by 2028E, along with turning points in FCF and ROCE and improving valuation.

  Weaknesses

  Sensitive to copper prices and project delivery timing.

  Comparison

  More favored than Anglo American within EMEA.

  Risks

  Project execution, copper prices, cost inflation, and regional operating risks.

• AAL LN

  Rated Underweight by J.P. Morgan and placed on Negative Catalyst Watch.

  Strengths

  Its diversified mining asset portfolio provides a certain resource base.

  Weaknesses

  The report believes it is most exposed to cost-driven risks, including elevated iron ore freight costs in Brazil and South Africa and weakness in diamonds.

  Comparison

  Compared with preferred names such as Antofagasta, BHP, and RIO, Anglo American offers weaker risk-reward.

  Risks

  2Q production results, rising costs, weakness in the diamond business, and tail risk from the suspension of the Collahuasi desalination plant.

• GLEN LN

  Copper-related covered name, rated Neutral by J.P. Morgan.

  Strengths

  Owns a 44% stake in Collahuasi, providing exposure to a significant copper asset.

  Weaknesses

  In the table, target price is 520.0, share price is 516.7, and upside is only 1%, implying limited valuation upside.

  Comparison

  Rated below Overweight names such as Antofagasta, BHP, RIO AU, and FCX.

  Risks

  If the suspension of the Collahuasi desalination plant is prolonged, it could affect copper recoveries in H2'26 or 2027.

• Copper

  Core commodity asset, with the report centered on copper prices, inventories, and supply and demand.

  Strengths

  Tighter ex-US inventories, strong China cathode spot premiums, and elevated LME cancelled warrants support the price floor.

  Weaknesses

  The global refined market is in surplus by more than 500kmt in 2025, and prices have already risen more than 40% year-on-year, leaving limited cheapness.

  Comparison

  The report believes current copper prices are influenced more by US tariff front-running and Chinese buying than by traditional supply-demand models.

  Risks

  Changes in the tariff path, US inventory destocking, weaker-than-expected demand, substitution risk, and softer macro PMI.

Key data

• Visible global copper inventories1.05MtDown from 1.37Mt in March, mainly due to destocking in SHFE and Chinese bonded warehouses.
• China SHFE and bonded warehouse destockingdown 450kt to ~120ktThe report says this is the main driver of easing global inventories.
• US LME and COMEX inventories~725kt / ~70% of global totalUS inventories continue to rise, reflecting tariff front-running and attraction from COMEX/LME arbitrage.
• Copper price~$6-6.2/lb, +8% YTDPrices remain resilient, and the report believes the main drivers are Chinese dip buying and US tariff front-running.
• China demandflat YTD through MayHigher refined copper production was offset by lower imports.
• Global mine production+1.4% YTD through AprilMine supply growth is modest.
• 2025 global refined marketsurplus over 500kmtDespite the surplus, geographic inventory mismatch still supports prices.
• Potential tariff path15% from Jan 2027, 30% from Jan 2028The J.P. Morgan team believes the US government may adopt phased escalating tariffs on refined copper cathode imports.
• Antofagasta copper production growth~30% to 2028EThis is one of the main reasons for upgrading Antofagasta to Overweight.

Impact & implications

From an investment perspective, the key variable for copper prices has shifted from the traditional supply-demand balance to policy and the geographic distribution of inventories. If US tariff expectations continue to attract copper into the US, available inventories outside the US could decline further, reinforcing the price floor and earnings leverage for copper mining stocks. At the equity level, miners with copper production growth, improving cash flow, and room for valuation rerating should benefit more; however, companies facing cost pressure, weaker business mix, or higher risk of disruption in specific projects may underperform.

Risks

• There is uncertainty around the outcome of US Section 232 copper import tariffs, which could change the pace of US inventory accumulation or destocking.
• If US inventories continue to increase, markets outside the US may tighten further, but if inventories flow back or are destocked after policy clarity, support for copper prices could weaken.
• Copper prices are already at high levels, around $13,600/mt and up more than 40% year-on-year, so both valuations and commodity prices face correction risk.
• The global refined copper market is still in surplus by more than 500kmt in 2025, so the traditional supply-demand balance does not fully support extremely optimistic pricing.
• If the copper-aluminum price ratio stays above 4x, it could create substitution risk in demand.
• Anglo American faces cost-driven risks, including elevated iron ore freight costs in Brazil and South Africa and weakness in the diamond business.
• If the suspension of the Collahuasi desalination plant is prolonged, it could create tail risk for copper recoveries at Anglo American and Glencore in H2'26 or 2027.

What to watch

• The final path, implementation timing, and tariff rates for US refined copper cathode import tariffs.
• Whether US LME and COMEX inventories continue to build, and changes in their share of global inventories.
• Whether ex-US LME on-warrant inventories and Chinese inventories continue to decline.
• China copper cathode premiums, the import arbitrage window, and the strength of buy-the-dip demand.
• Whether LME cancelled warrants and spot spreads continue to indicate tighter available inventories.
• Whether China demand, imports, and refined production improve in the coming months.
• The pace of global mine production growth, especially supply changes in Chile, Peru, DRC, Indonesia, and other regions.
• Anglo American’s 2Q production results and progress on the Collahuasi desalination plant suspension.
• Whether Antofagasta delivers its copper production growth, FCF, and ROCE inflection through 2028E.