China copper buyers scramble for metal as spot premiums rise
Tightening supplies from domestic smelters and limited overseas availability have caused spot copper premiums in Shanghai to reach their highest level since 2021.
Copper buyers in China are seeking physical metal as spot premiums rise due to tightening supplies in the country, according to a report by Mint.
The premium for spot copper in Shanghai reached 1,900 yuan a ton over futures on Wednesday, marking the highest level since 2021, based on Shanghai Metals Market data.
Zhou Xiaoou, an analyst at Zijin Tianfeng Futures Co., said the shortage is caused by production cuts at domestic smelters and limited supplies from Russia and Africa. He noted that fabricators are buying hand to mouth.
The supply squeeze is also affecting futures markets. Shanghai copper for December is trading at an $880-a-ton premium to January, which represents the steepest backwardation seen since 2022.
Additionally, the Yangshan premium for imported copper has reached all-time highs. On the London Metal Exchange, copper futures rose 0.2 per cent to $14,044.50 a ton as of 10:16 a.m. in Singapore.
Other base metals also saw gains, with aluminum increasing by 1.1 per cent and iron ore futures rising 1.2 per cent to $92.75 a ton in Singapore.
