Shanghai spot copper premiums surged to a record 2,615 yuan/mt on November 6, as severe inventory shortages and diverted supply chains tightened the market for immediate delivery. The premium, assessed by Shanghai Metals Market, jumped 515 yuan/mt from the previous trading day, signaling intense competition for metal available for near-term delivery.
The average premium ranged from 2,480 to 2,750 yuan/mt over the Shanghai Futures Exchange’s November 2026 copper contract (CU2611), while the average outright spot price fell by 605 yuan/mt to 109,600 yuan/mt. The widening gap between nearby and deferred futures contracts reflected stronger demand for immediate metal at a time when the market is struggling to secure supplies. The backwardation between CU2611 and the December 2026 contract (CU2612) widened from a range of 900–1,000 yuan/mt at the start of the week to 1,900–2,260 yuan/mt by Friday.
Copper Inventories Drop in China
By November 5, SMM-monitored copper cathode stocks in principal Chinese markets had declined to roughly 62,600 tonnes, a decrease of 71,800 tonnes from the 134,400 tonnes recorded twelve months prior. Shanghai and Jiangsu saw their inventories drop to a little above 40,000 tonnes and 10,000 tonnes, respectively, because of minimal arrivals of both domestic and imported cathode in East China. The rerouting of supplies from overseas to the United States impacted Chinese stock levels, with over 70% of London Metal Exchange copper inventories located in US depots as of November 5. China’s imports of copper cathode for the January–September period amounted to 2,138,300 tonnes, a decline of 16.34% compared to the same period the previous year.
Smelters Struggle with Material Shortages
Smelters are confronting difficulties due to a lack of raw materials, compelling them to agree to negative spot treatment and refining charges for almost two years, in practice paying to obtain supplies. Diminished sulfuric acid values have eroded a key profit stream, leading some operators to prolong maintenance shutdowns. Eleven smelters conducted maintenance in October, with a projected production impact of 103,200 tonnes, causing domestic copper cathode production to fall 3.03% from the previous month to 1,086,700 tonnes. The strain from premiums has also affected processing firms, with some curtailing production lines partially because of elevated costs and unfavorable economics for purchasing copper.
Impact on Downstream Demand
These developments illustrate how the metal shortage is moving from inventories and delivery into the expenses and operational choices of industrial buyers. An analyst at Zijin Tianfeng Futures attributed the persistent shortage to reduced output from domestic smelters and restricted international supplies, including from African and Russian sources. He stated that manufacturers were purchasing to satisfy their immediate requirements. On November 6, SMM calculated the average #1 copper cathode spot premiums at RMB 2,615/t over the Shanghai Futures Exchange’s November 2026 copper contract, establishing a record. Higher Yangshan premiums indicate constrained prompt availability and increase the expense of securing further imports.
