Key Highlights

  • Copper surged nearly 3% to around $6.48 per pound on Tuesday, its highest level in five weeks.
  • China's premium for imported copper climbed to $100 per tonne, the highest since May last year.
  • LME warehouse inventories fell to their lowest level since March.
  • Storms in Chile weighed on output at South32, Antofagasta, and Codelco.

Copper surged nearly 3% to around $6.48 per pound on Tuesday, hitting its highest level in five weeks, as tightening physical market conditions in China and supply disruptions in major producing regions continued to support prices.

What Happened

China's premium for imported copper climbed to $100 per tonne, the highest since May last year, as Beijing's crackdown on VAT fraud constrained scrap availability and boosted demand for refined copper imports.

Inventories in LME warehouses fell to their lowest level since March, while Chinese stockpiles remained near the bottom of their seasonal range as traders redirected metal to the world's largest consumer.

Supply concerns were further reinforced by weather-related disruptions in Chile, with recent storms weighing on output at major miners including South32, Antofagasta, and Codelco.

Market Reaction

The bullish supply outlook offset jitters over the ongoing US-Iran conflict, suggesting copper-specific fundamentals dominated the metal's price action rather than broader geopolitical risk sentiment.

Outlook

With China's import premium at its highest level in over a year and both LME and Chinese inventories running low, physical market tightness is likely to remain a key support for copper prices, alongside any further weather-related disruptions in Chile.

Why did copper prices surge nearly 3% to a five-week high?

Prices rose on tightening physical market conditions in China, including a higher import premium and falling LME inventories, alongside weather-related supply disruptions in Chile.

Why is China's copper import premium rising?

Beijing's crackdown on VAT fraud has constrained scrap availability and boosted demand for refined copper imports, pushing the premium to $100 per tonne, its highest since May last year.

Which Chilean copper miners were affected by storms?

South32, Antofagasta, and Codelco all saw output affected by recent weather-related disruptions.