Copper buyers in China are facing a growing challenge as supplies of the metal tighten sharply. The premium for spot copper in Shanghai surged to 1,900 yuan ($285) a ton over futures on Wednesday, marking the highest level since 2021. This spike reflects the increasing scarcity of immediately available cathode, driven by production cuts from Chinese smelters.
The surge in spot premiums highlights the intensifying squeeze in the copper market. According to data from Shanghai Metals Market, the premiums have reached levels not seen in years, signaling a significant supply crunch. The situation is particularly acute in China, the world’s largest consumer of copper.
The tight supply conditions are likely to put upward pressure on copper prices in the near term. Buyers are scrambling to secure physical metal, which could lead to further volatility in the market. The production curbs by smelters are a key factor contributing to the current squeeze.