China Copper Demand Boosts Prices Amidst Ongoing Policy Uncertainty

Copper prices have stabilized after a brief pullback from last week's record high of about $14,188 a metric ton on the London Metal Exchange (LME). This follows news that China's import demand is strong, with the Yangshan premium, a fee on top of the LME price for importing copper into China, climbing 7% to $118 a ton. BNP Paribas notes that buyers are using lower prices to restock.

However, despite this increase in demand, policy uncertainty remains a major factor affecting global metal prices. The US has yet to decide whether to add tariffs on refined copper, which could further diverge US pricing from the rest of the world. This divergence is already evident, with LME spreads moving into contango, meaning later-dated prices are higher than near-term ones.

This shift in market sentiment may have significant implications for manufacturers and traders relying on physical supply priced off one benchmark but referencing another. The recent swing in the COMEX-over-LME gap shows how quickly regional benchmarks can diverge, especially if US tariff rules change the expected cost of importing or producing refined metal.