China’s Copper Import Premium Hits $205 a Ton as Local Supply Tightens
Key Facts
China’s average premium for imported copper was $205 a ton above the London Metal Exchange price on October 28, up $17 from the previous day, according to data reported by Krouks Investor citing the Shanghai Metals Group. The increase reflects an additional cost paid by Chinese buyers to obtain refined metal in the local market. In northern China, spot copper premiums jumped 160 yuan in one day to 690 yuan a ton. Krouks said suppliers held back shipments, adding to tightness in spot supply. The figures show a contrast between an expected global surplus and the difficulty Chinese buyers face in obtaining available supplies.
The International Copper Study Group forecast a global surplus of 104,000 tons of refined copper in 2026, widening to 368,000 tons in 2027. But Krouks said the surplus was concentrated in U.S. warehouses, while refined copper remained scarce in China. Shanghai Futures Exchange inventories stood at 54,400 tons, according to the article published on October 28. The different locations of inventories mean that an overall surplus does not automatically translate into metal availability in the Chinese market. The report linked the concentration of metal in the United States to uncertainty over potential tariffs on copper imports.
Reuters reported on October 14 that U.S. Comex-approved warehouses held about 70% of visible global inventories, after the tariff threat helped push U.S. stocks above 1 million tons. The U.S. Commerce Department was due to submit a report on the domestic market by June 30, enabling the president to decide whether to impose a potential tariff on refined copper imports. The proposal included a 15% tariff starting January 1, 2027, rising to 30% in 2028. No decision on the tariffs had been announced as of October 14, Reuters reported. The path of these inventories remains tied to clarity on U.S. trade policy, which could affect the direction of metal flows between markets.
On the supply side, the International Copper Study Group lowered its forecast for mine production growth in 2026 to 1.3% from 1.6% in its April forecast. It attributed the cut to ongoing disruptions at Grasberg in Indonesia and Kamoa-Kakula in the Democratic Republic of the Congo, as well as lower output in Chile. These factors provide a backdrop to supply tightness, even as a global surplus in refined copper is expected. Buying premiums in China remain an indicator of the cost of obtaining shipments available in the spot market. The average premium for bill-of-lading shipments also reached 195 yuan a ton on October 28, up 20 yuan from the previous trading day, according to Shanghai Metals Group data.
In the United States, the Federal Reserve on October 28 kept its target interest rate range at 3.75% to 4%, after a 10-to-2 vote. The two dissenting members preferred raising the range by a quarter percentage point. The central bank said economic activity was expanding at a solid pace and inflation remained elevated, reaffirming its aim to return it to the 2% target. Ahead of the decision, the Associated Press expected rates to hold steady, citing an acceleration in inflation in recent months as oil and gas prices rose in connection with the Iran war. Copper closed at 6.6475 in EL7 data on October 28, compared with 6.6525 the previous day.
The Federal Reserve scheduled the release of minutes from its October 27–28 meeting for November 18, then will hold its next meeting on December 8–9. These dates follow the decision to keep rates unchanged, in which the central bank said it needed more information to determine the appropriate path for policy. As for the copper market, no U.S. tariff decision had been announced as of October 14, according to Reuters. These dates put monetary policy on a timeline separate from the trade decision that could affect the flow of U.S. inventories. Meanwhile, Chinese premiums remained elevated amid tight local supply, according to market data published on October 28.