Copper buyers in China are facing a growing squeeze as supplies tighten sharply in the world’s largest consumer of the metal. Spot premiums in Shanghai surged to 2,100 yuan a ton over futures on Thursday, the highest level since 2021, according to Shanghai Metals Market. The spike reflects a severe shortage of immediately available cathode copper, driven by production cuts at Chinese smelters and limited imports from regions like Africa and Russia.
The supply crunch is also evident in futures markets, with Shanghai copper for December trading at a $900-a-ton premium to January, the steepest backwardation since 2022. The Yangshan premium for imported copper hit a record $210 a ton, underscoring strong domestic demand. Analyst Zhou Xiaoou from Zijin Tianfeng Futures Co. attributed the shortage to production cuts and constrained overseas supplies, noting that fabricators are buying metal as needed.
While copper prices have rallied to record highs this year due to demand from U.S. data centers and potential tariffs, the recent surge in spot premiums is primarily due to supply shortages rather than increased demand. Mysteel reported that buying interest has picked up slightly after a price pullback, but it is mainly from large cable manufacturers replenishing thin inventories. Copper futures on the London Metal Exchange rose 0.4% to $14,067 a ton, with other base metals like aluminum and nickel also gaining.