Copper’s bigger than some altcoin narratives as China pays over $200 while LME slides

Chinese buyers are paying a record premium of over $200 a ton to import copper, even as the benchmark price in London fell to a one-week low on Friday. The Yangshan premium, which tracks the extra cost Chinese importers pay over London Metal Exchange (LME) prices, spiked past $200, according to The Kobeissi Letter—the highest level in Fastmarkets data going back to 2017.

The premium has more than doubled in 3 months and is up 700% since the start of 2026, The Kobeissi Letter said. China’s copper inventories have fallen over 25% to 54,356 tonnes, according to Bull Theory, while Bloomberg reported that refined copper output from Chinese smelters fell 1.1% year-on-year in the third quarter as higher costs pushed producers to trim production. Extra supply from Africa could take 1 to 2 months to reach China, Bull Theory said.

Futures moved in the opposite direction. Three-month copper futures fell 1.4% on Friday to settle at $14,154.50 a ton on the LME, leaving the benchmark below its September record of $14,875. Bloomberg tied Friday’s decline to a tech selloff and oil at its highest since April, while Guangzhou Futures Co. said doubts over artificial intelligence (AI) spending were weighing on risk appetite. “The sharp decline in technology stocks has fueled market skepticism regarding returns on AI investments, leading to a retreat in risk appetite and putting downward pressure on copper,” Guangzhou Futures Co. stated.

Mining stocks also fell: Southern Copper dropped 7.42% and Freeport-McMoRan lost 5.55% on October 30. Spot copper traded over $170 a ton above three-month futures on Friday, Bloomberg reported, while The Kobeissi Letter put the LME gap at $217, the widest since mid-August. Global copper inventories still exceed 1.2 million tons, Bull Theory noted, but much of that stock is concentrated in the US.

The physical market remains tight as expected US tariffs on refined copper divert hundreds of thousands of tons to the US. “The physical copper supply squeeze is far from over,” The Kobeissi Letter said. The White House has yet to rule on a proposed 15% tariff on refined copper from January 2027; Shanghai Metals Market (SMM) said US stockpiles will remain until the policy is clarified, while also seeing tight supply persist in the short term. SMM said an unfavorable Shanghai-to-London price ratio will slow further gains in import premiums.