China copper buyers scramble for metal as spot premiums rise
Spot copper premiums in Shanghai reached their highest levels since 2021 as production cuts and limited overseas supplies tighten availability.
Copper buyers in China are seeking physical metal as spot premiums rise due to tightening supplies in the country, according to a report by Mint.
The premium for spot copper in Shanghai rose to 1,900 yuan a ton over futures on Wednesday, marking the highest level since 2021, based on Shanghai Metals Market data.
Zhou Xiaoou, an analyst at Zijin Tianfeng Futures Co, said the shortage is caused by production cuts at domestic smelters and limited supplies from overseas locations such as Russia and Africa. He noted that fabricators are buying hand to mouth.
The supply squeeze is also reflected in futures markets, where Shanghai copper for December traded at an $880-a-ton premium to January. This represents the steepest backwardation since 2022, while the Yangshan premium for imported copper has reached all-time highs.
Copper prices have rallied to record levels this year amid bets that the Trump administration would impose tariffs on refined metal. However, the surge has eased recently due to concerns regarding the durability of data center spending.
On the London Metal Exchange, copper futures rose 0.2 per cent to $14,044.50 a ton as of 10:16 a.m. in Singapore. Aluminum increased by 1.1 per cent, while iron ore futures rose 1.2 per cent to $92.75 a ton.
