The shortage has driven Shanghai spot copper to a 1,900 yuan per ton premium over futures, marking the steepest such gap since 2021. Market dislocations are deepening further, evidenced by Shanghai December contracts trading at an $880-a-ton premium over January contracts in the widest backwardation since 2022. Concurrently, the Yangshan premium for imported copper has surged to an all-time high as domestic stockpiles run dry. On the global stage, London Metal Exchange copper futures ticked up 0.2% to $14,044.50 a ton alongside gains in aluminum and iron ore.
Key points
Chinese fabricators are being forced to purchase copper on a hand-to-mouth basis due to s…: Chinese fabricators are being forced to purchase copper on a hand-to-mouth basis due to severe regional cathode shortages.
Inbound material costs have reached uncharted territory as the Yangshan premium for impor…: Inbound material costs have reached uncharted territory as the Yangshan premium for imported copper climbed to an all-time high.
Prior inventory flows toward the United States driven by tariff expectations have exacerb…: Prior inventory flows toward the United States driven by tariff expectations have exacerbated physical supply strains overseas.
Sources checked by our analysis pipeline: 1
Copper buyers in China are scrambling for physical metal, with spot premiums soaring as supplies tighten sharply in the world’s biggest consumer.
The premium for spot copper in Shanghai jumped to 1,900 yuan a ton over futures on Wednesday, the highest since 2021, according to data from Shanghai Metals Market. The surge is the latest sign that immediately available cathode is becoming increasingly scarce as production curbs by Chinese smelters tighten supplies.
“The persistent shortage is due to production cuts at domestic smelters and limited supplies from overseas such as Africa and Russia,” said Zhou Xiaoou, analyst at Zijin Tianfeng Futures Co. “Fabricators are buying hand to mouth.”
Copper has rallied to record levels this year as bets the Trump administration would slap tariffs on refined metal drew huge volumes to the US, squeezing markets elsewhere. The surged has eased in recent weeks, however, as concerns mount over the durability of the spending boom on data centers that has become a key driver of demand.
The squeeze is also showing up in futures, with Shanghai copper for December trading at…
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