Copper Slips to One-Week Low Despite China's Record Premium

Chinese importers are paying a record premium of more than $200 a ton to import copper, yet the London benchmark price still slipped to a one-week low on Friday.

Bloomberg tied Friday's retreat to a tech selloff and oil prices at their highest since April. At the same time, the physical market is tightening as copper accumulates in the US.

China's Record Premium Reflects Depleting Stockpiles

The Yangshan premium measures the extra cost Chinese buyers pay on top of London Metal Exchange (LME) prices. The Kobeissi Letter reported that this premium surged beyond $200, a level not seen in Fastmarkets data since 2017.

The Kobeissi Letter's post attributed the surge to robust Chinese demand and stockpiles that are lower than usual for the time of year. Multiple indicators point to how constrained supply has become.

• The Kobeissi Letter notes the premium has more than doubled in 3 months and risen 700% since the start of 2026.
• Bull Theory said in an X post that China's copper inventories have fallen over 25% to 54,356 tonnes.
• Bloomberg reported that Chinese smelters have reduced output due to higher costs, with refined copper production down 1.1% year-on-year in the third quarter.
• Bull Theory pointed out that extra supply from Africa could take 1 to 2 months to arrive in China.

Bull Theory observed that global copper inventories still exceed 1.2 million tons, but The Kobeissi Letter said much of that stock is concentrated in the US.

Why Are Copper Futures Falling?

Futures, meanwhile, have moved in the opposite direction. Three-month copper futures dropped 1.4% on Friday to settle at $14,154.50 a ton on the LME, leaving the price below its September record of $14,875.

Miners experienced steeper losses. Southern Copper fell 7.42%, while Freeport-McMoRan lost 5.55% on October 30.

Guangzhou Futures Co. attributed the drop to skepticism about artificial intelligence (AI) spending.

“The sharp decline in technology stocks has fueled market skepticism regarding returns on AI investments, leading to a retreat in risk appetite and putting downward pressure on copper.” Guangzhou Futures Co. stated.

Bloomberg reported that spot copper traded more than $170 a ton above three-month futures on Friday. Kobeissi put the LME gap at $217, the widest since mid-August.

The Kobeissi Letter said anticipated US tariffs on refined copper have shifted hundreds of thousands of tons to the US.

“The physical copper supply squeeze is far from over,” the analysts wrote.

The White House has yet to rule on a proposed 15% tariff on refined copper from January 2027. Shanghai Metals Market (SMM) said US stockpiles will remain as they are until the White House clearly backs away from the tariff.

SMM also expects supply tightness to continue for now. Still, it noted that an unfavorable Shanghai-to-London price ratio will temper additional increases in import premiums.