(Bloomberg) -- Copper rallied to a fresh record as a surge in orders to withdraw metal from London Metal Exchange warehouses compounded worries that potential US tariffs will fuel a global supply squeeze.

Futures rallied as much as 2.6% in London to trade above $11,400 a ton, surpassing a peak struck on Monday, after data from the LME showed a spike in orders for copper from its depots in Asia. Mining stocks also rallied, with Chilean copper producer Antofagasta Plc jumping more than 5% to a record high.

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The bellwether industrial metal has been ratcheting higher in recent weeks as a growing chorus of traders and analysts have warned that global inventories could soon be drained to critically low levels as huge volumes of metal are shipped to the US in anticipation of tariffs.

The LME’s global benchmark price is up more than 30% this year, but US futures have rallied even further, with investors betting that President Donald Trump will announce levies on primary forms of the metal.

Trump first formally laid out plans to do so in February, in an announcement that rocked the global copper market and drove US copper imports to record highs. In late July, he wrong-footed the market by saying he’d limit the levies to value-added copper products, while pledging to review whether to push ahead with tariffs on commodity-grade forms of the metal from 2027.

The decision has had huge ramifications in the physical copper market, with traders once again ramping up shipments to American ports as US futures surge. Producers have also announced that they’ll charge record premiums to supply customers in Europe and Asia next year, with buyers in effect compensating them for the additional profits they could make selling to the US.

Major metals trader Mercuria Energy Group Ltd. last week warned that those trade dynamics could fuel a major global supply squeeze by the first quarter of next year, predicting that copper prices will push even deeper into uncharted territory.

What Bloomberg Strategists Say...

“The scale of those LME withdrawals indicates that available supply is being drawn down more quickly than before, and it raises the prospect of further tightness, heading into next year. ...Flow imbalances between regions are helping reinforce the price surge. Finally, all those trends have emerged alongside stronger investor interest in commodities. The result is a market structure that validates higher prices.”

— Nour Al Ali, Markets Live strategist. For full analysis, click here.

At a fundamental level, the copper market has been hit by a slew of mine outages from Chile to Indonesia that have tightened supplies this year. The latest signs of tightness came on Wednesday.

Ivanhoe Mines Ltd. trimmed the outlook for production from its vast Kamoa-Kakula complex in the Democratic Republic of Congo as it continues to recover from flooding earlier this year. Glencore Plc — which has seen a 40% drop in output since 2018 — also cut its target for next year on Wednesday, but said it’s aiming to roughly double production over the coming decade.

The supply concerns have propelled copper prices even in a tepid environment for demand. Chinese smelters and miners are locked in supply talks for 2026 that are proving difficult, as miners hold the upper hand in negotiations.

Copper was up  to $ a ton as of 1:12 p.m. on the LME, taking gains for this year to about 30%. Aluminum gained  while zinc was little changed.

--With assistance from Winnie Zhu.

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