Copper Prices Soar on China Restocking Binge

Copper prices have been on a tear lately, with three-month copper on the London Metal Exchange (LME) settling at $14,783 a metric ton, up 0.8% according to Shanghai Metals Market.

This leaves copper just $92 short of its all-time high of $14,875 set in September. The run is copper's longest in four months, with prices gaining roughly 18% this year and Comex prices up 21%, according to Bloomberg data.

The surge has little to do with the White House's stalled copper tariff plan, which knocked over 5% off U.S. prices two weeks ago. Instead, it's being driven by physical metal shortages in China, where inventory levels are at a three-year low.

Copper cathode stocks in Shanghai fell to 43,900 tons last week, while inventories in Shanghai Futures Exchange warehouses are down 70% since early June. Imported cargoes that do arrive are going straight to fabricators instead of storage, and spot cathode in Shanghai is commanding a premium over SHFE futures.