China’s copper squeeze intensified on Friday. Shanghai Metals Market reported CIF Yangshan registered copper premiums approaching 300 dollars a tonne, a record high, as persistently low inventory in China, the approaching Shanghai Futures Exchange delivery date and a widening spread between futures contracts lifted import arbitrage profits across cash month, November and December contracts.
The move extends a squeeze first reported on November 10. The Yangshan import premium had already reached a record 230 dollars a tonne on November 9, and Shanghai spot premiums tripled in two weeks to a record 2615 yuan a tonne. SHFE monitored inventories fell more than 24 percent in the week to November 6 to 33,848 tonnes, their lowest in almost three years and less than a day of Chinese consumption.
The divergence is the story. LME three month copper suffered its steepest weekly decline since March in the week ending November 6, falling 2.7 percent, while physical buyers in China paid more, not less, to secure prompt metal. US warehouses hold the bulk of global exchange stocks, so metal exists, but not where Chinese fabricators need it.
Site tables put copper at 6.15 dollars a pound, down 0.52 percent on the day. Futures are pricing growth and AI demand risk; premiums are pricing availability today.