Premiums for immediate copper in China hit records as Shanghai warehouse inventories fell more than 24% in a week to 33,848 tonnes. London prices fell at the same time, on fading hopes for US tariffs and AI demand.
At a glance
- Shanghai inventories now cover less than a day of Chinese copper use, Reuters and Bloomberg reported.
- Trafigura has been buying large volumes for November and December, people familiar with the matter told Bloomberg.
- TD Securities said another $500 a tonne drop in London prices would not be a major surprise.
Background
A spot premium is the extra a buyer pays above the futures price to get metal now. The Yangshan premium tracks what Chinese buyers pay for imported copper. Backwardation means near-term contracts cost more than later ones, a sign of tight supply. The US has proposed duties on refined copper, which has drawn metal into American warehouses and away from other markets.
What happened
Copper inventories in Shanghai Futures Exchange warehouses fell more than 24% this week to 33,848 tonnes, the lowest in almost three years, Reuters reported.
Spot premiums in Shanghai tripled in two weeks to a record 2,615 yuan a tonne, Shanghai Metals Market data showed, Bloomberg reported. The Yangshan import premium reached a record $217.50 a tonne.
London moved the other way. Three-month copper fell to $13,636 a tonne on Friday, its lowest since July 30, and was on course for a 2.6% weekly drop, the steepest since March.
Why China is short of metal
Smelters are struggling to get mined ore and scrap, so refined output has slowed. Demand is "fairly lackluster", which points to supply as the cause, Morgan Stanley strategist Amy Gower told Bloomberg.
Traders have also sent metal to the US for two years ahead of possible tariffs. TD Securities estimates US inventories at about 1.6 million tonnes.
Trafigura has asked producers and traders in Asia for large volumes for November and December, and has outbid rivals, people familiar with the matter told Bloomberg. Trafigura declined to comment.
What it means
The market is split between tight physical supply and a weaker outlook. TD Securities said Democratic gains weaken the case for tariffs and raise doubts about demand from data centres.
Deutsche Bank's Daniel Ghali said tariffs remain under President Trump's authority, and that bears need "a recessionary spiral". The proposed 15% duty on refined copper from January 2027 is still subject to a presidential decision.
India has not followed so far. Its import premium fell $50 to $295 a tonne in November on moderate demand, BigMint reported, though it remains above China's record levels.
Our read
Outlook: neutral. Record premiums and low Shanghai inventories point to tight supply, while weaker tariff and data-centre expectations are pushing London prices lower.
What to watch
- A US decision on refined copper tariffs.
- Whether Chinese manufacturers buy on the price dip.
- Whether high premiums draw metal out of US warehouses.
For information only, not investment advice.
Copper price in India
metalscost.com India reference price as of 2026-11-10.
Detailed analysis
Timeline
- 2026-11-06: Three-month copper touches $13,636 a tonne, its lowest since July 30.
Inventory Drivers
Shanghai warehouse inventories fell more than 24% in a week to 33,848 tonnes.
Trade Tariffs
US refined copper duties of 15% from January 2027 remain proposed and depend on a presidential decision.
Refinery Output
China's smelting output has slowed because of limited ore and scrap.
What could lift prices
- Shanghai inventories cover less than a day of Chinese use.
- Record premiums show buyers are competing for immediate metal.
What could weigh on prices
- TD Securities says data-centre demand could fall short of projections.
- Fading tariff expectations could end the flow of metal into the US.
Country impact
| Country | Impact | Reason |
|---|---|---|
| China | High | Smelters face limited feedstock, and buyers are paying record premiums. |
| United States | High | Tariff policy decides whether metal stays in American warehouses. |
| India | Medium | The Indian import premium fell to $295 a tonne in November, BigMint reported. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Copper Smelting & Refining | Negative | Smelters in China are struggling to secure mined ore and scrap. |
Who gains, who loses
- Traders with metal in Asia: Record premiums raise the value of immediately available copper.
- Chinese copper fabricators: They must pay record premiums to secure spot cargoes.
Other ways this could play out
- If the US rules out tariffs, American inventories could flow back overseas and ease the squeeze.
- If Chinese buyers step in on the dip, inventories could fall further and premiums could stay high.
Price risks
- Some traders expect premiums to reverse quickly if supply improves.
- Disruptions to exports from Congo could tighten China's supply further.
Technical view
Price is trading below both its 20-period and 50-period moving averages, a bearish alignment.
Computed from metalscost.com's own stored price history.
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United States
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