Copper buyers in China are scrambling for physical metal, with spot premiums soaring as supplies tighten sharply in the world’s biggest consumer.
The premium for spot copper in Shanghai jumped to 1,900 yuan a ton over futures on Wednesday, the highest since 2021, according to data from Shanghai Metals Market. The surge is the latest sign that immediately available cathode is becoming increasingly scarce as production curbs by Chinese smelters tighten supplies.
“The persistent shortage is due to production cuts at domestic smelters and limited supplies from overseas such as Africa and Russia,” said Zhou Xiaoou, analyst at Zijin Tianfeng Futures Co. “Fabricators are buying hand to mouth.”
Copper has rallied to record levels this year as bets the Trump administration would slap tariffs on refined metal drew huge volumes to the US, squeezing markets elsewhere. The surged has eased in recent weeks, however, as concerns mount over the durability of the spending boom on data centers that has become a key driver of demand.
The squeeze is also showing up in futures, with Shanghai copper for December trading at an $880-a-ton premium to January, the steepest backwardation since 2022. Meanwhile, the Yangshan premium for imported copper, another gauge of domestic demand, has hit all-time highs.