Chinese importers are currently paying a record premium exceeding $200 per ton for copper imports. This figure represents the highest level recorded in Fastmarkets data since 2017 and marks a 700% increase since the beginning of 2026. The surge is driven by strong demand and inventory levels that remain below typical seasonal averages.
Despite high physical demand, copper futures have declined. On Friday, three-month copper futures on the London Metal Exchange fell 1.4% to settle at $14,154.50 per ton. This drop follows a broader market trend, with shares of major miners like Southern Copper and Freeport-McMoRan falling by 7.42% and 5.55% respectively on October 30.
Market analysts attribute the divergence between physical premiums and futures prices to skepticism regarding artificial intelligence investments and a broader tech selloff. Additionally, potential US tariffs of 15% on refined copper, proposed for January 2027, have caused hundreds of thousands of tons of supply to be diverted to the United States, tightening the global market.
Domestic production in China is also under pressure, with refined copper output falling 1.1% year-on-year in the third quarter. While global inventories remain above 1.2 million tons, much of this supply is concentrated in the US. Analysts from the Shanghai Metals Market expect supply to remain tight in the short term, though unfavorable price ratios may limit further premium growth.
