Copper Prices Fall Despite Record Premiums for China

Chinese buyers are paying a record premium of over $200 per ton for copper imports, while the benchmark price in London fell to a weekly low on Friday. Bloomberg linked the drop to a sell-off in tech stocks and oil reaching its highest level since April, but the physical market continues to tighten as copper accumulates in the US.

Premium and Stocks

The Yangshan premium reflects the surcharge Chinese importers pay over London Metal Exchange (LME) prices. According to The Kobeissi Letter, it exceeded $200 – the highest in Fastmarkets data since 2017. The reasons are strong demand in China and stocks below usual seasonal levels. Over three months, the premium has more than doubled, and since the beginning of 2026, it has increased by 700%. Copper stocks in China have fallen by more than 25% to 54,356 tons, according to Bull Theory. Chinese factories are cutting output due to rising costs: according to Bloomberg, refined copper production in the III quarter decreased by 1.1% year-on-year. Additional supplies from Africa may take one to two months to reach China.

Futures and Stocks

Futures moved in the opposite direction: the three-month contract on the LME fell by 1.4% on Friday to $14,154.50 per ton – below the September record of $14,875. Miners fell even more: Southern Copper lost 7.42%, Freeport-McMoRan – 5.55% on October 30. Guangzhou Futures Co. explained this with doubts about returns on AI spending: "The sharp drop in tech stocks has heightened market skepticism about the profitability of AI investments, leading to risk aversion and pressure on copper."

Spot copper traded more than $170 per ton above three-month futures on Friday, according to Bloomberg; Kobeissi estimated the LME gap at $217 – the highest since mid-August.

Tariffs and Forecasts

Global copper stocks exceed 1.2 million tons, but a significant portion is concentrated in the US: the anticipation of a tariff on refined copper has redirected hundreds of thousands of tons there. The White House has yet to make a decision on the proposed 15% tariff from January 2027. Shanghai Metals Market (SMM) notes that stocks in the US will remain in place until Washington explicitly rejects the tariff, and supply shortages will persist in the short term; the unfavorable Shanghai/London price ratio will slow further growth in import premiums. "The physical shortage of copper is far from over," write Kobeissi analysts.