Copper climbs as Chinese import premiums surge to fresh records
Copper prices clawed back some of the prior week's sharp decline on Monday, with Chinese import premiums hitting all-time highs as physical metal supply tightened further across the country.
The Yangshan benchmark, which gauges appetite for copper flowing into China, reached an unprecedented $230 per tonne at the start of the week. Meanwhile, Shanghai Metals Market data showed spot premiums in the city tripling within a fortnight to an all-time high of 2,615 yuan, or roughly $392 per tonne. Separately, Fastmarkets figures showed premiums on imported copper surging over 40% to a range of $195-210 per tonne — the steepest reading since the firm began tracking the metric in 2017.
Stockpiles held in warehouses tied to the Shanghai Futures Exchange dropped by more than a quarter during the week, sinking to 33,848 tonnes — a level not witnessed in close to three years, per analysis from John Gross at The Copper Journal. At that volume, reserves would barely sustain a single day’s worth of copper demand across China.
Ewa Manthey, a commodities analyst at ING, remarked that the rebound in copper reflected calmer risk appetite alongside renewed attention on scarce Chinese physical stock, noting the surging premiums confirm how difficult it has become to obtain the metal. She warned, however, that Monday’s uptick might not signal a definitive turnaround from the recent pullback, suggesting prices remain exposed to fresh softness should overall market mood sour again.
In New York, the December Comex copper contract changed hands around $6.3550 per pound — equivalent to $14,010 per tonne — marking a 1.9% daily gain. The London Metal Exchange’s three-month copper rose 0.9% to reach $13,890 per tonne, following a 2.7% slide the previous week. Shanghai’s futures contract edged up 0.5% to 107,430 yuan, or about $16,096 per tonne.
Smelting operations across China are finding it increasingly difficult to source both concentrate and scrap material, a constraint worsened by enforcement action against unauthorized mining operations in the Democratic Republic of Congo. The DRC, which supplies the bulk of China’s refined copper, saw authorities confiscate upward of 500 trucks alongside thousands of tonnes of copper and cobalt.
Shares of copper miners tracked the metal’s gains, with Freeport-McMoRan, Southern Copper, BHP, Rio Tinto and Glencore all posting advances.
Why it matters for markets: The combination of record-breaking import costs and depleted Chinese inventories signals an acute physical shortage that could sustain price swings in copper and lift related mining shares, though any broader pullback in investor risk appetite could reverse the metal’s gains.
Source: Mining.com