Copper Rebounds on China Supply Tightness

Copper futures climbed above $6.30 per pound on Monday, recovering from near four-month lows as signs of tightening supply in China, the world’s largest copper consumer, provided support, with import premiums reaching record highs. Industry data showed that the Yangshan copper premium, a key indicator of Chinese demand for imported copper, surged to $215 per ton, while the domestic premium over SHFE contracts climbed to 2,615 yuan. Meanwhile, copper inventories tracked by the Shanghai Futures Exchange dropped sharply to 33,848 tons last week, their lowest level since early January 2024. Prices also gained support from a recovery in global equity markets as concerns over stricter Democratic-led AI industry regulations eased. Copper benefits directly from the global AI expansion due to its essential role in data centers and power generation. Additionally, the Democrats’ sweeping midterm victory reduced the likelihood of Trump’s proposed tariffs on refined copper.