Copper Squeeze: China vs U.S. Stockpile

Bundles of cathode copper. Photo: ChrisFountain, CC BY-SA 3.0, via Wikimedia Commons.

Copper has two markets right now, and they are behaving like they are on different planets. In China, buyers are paying record premiums just to get their hands on cathode. In the United States, exchange warehouses are stuffed with metal that nobody wants to ship back out, because it could be worth more if Washington slaps a tariff on refined copper. Then last week’s midterm results threw that tariff bet into doubt.

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On Monday, November 9, 2026, COMEX copper for December delivery ($HG) settled at $6.3445 a pound, up 1.72%, the biggest gain among the five metals tracked in The Edge’s daily settlement wrap. That bounce came right after London copper’s worst week since March. The real story is the fight underneath the price.

China’s Copper Squeeze, by the Numbers

Patio de cátodos (copper cathode yard). Photo: Tarzanato, CC BY-SA 3.0, cropped — Patio de cátodos (copper cathode yard). Photo: Tarzanato, CC BY-SA 3.0, via Wikimedia Commons. Cropped by Intense Finance; the crop is shared under CC BY-SA 3.0.

Here is what the physical market showed going into Monday:

Record import premium. The Yangshan premium, which tracks what buyers pay for copper imported into China, hit a record $230 a tonne on Monday, Reuters reported.
Exchange stocks near multiyear lows. Copper in Shanghai Futures Exchange warehouses fell more than 24% last week to 33,848 tonnes, according to ADM Investor Services. Bloomberg notes that would cover China’s copper use for less than a day.
Spot premiums tripled. Shanghai spot premiums tripled in two weeks to a record 2,615 yuan a tonne, per Shanghai Metals Market data cited by Bloomberg. Fastmarkets’ imported-copper premium jumped more than 40% to $195–210 a tonne, the highest in its data back to 2017.
Steep backwardation. The December–January spread on the SHFE topped 1,200 yuan a tonne late Friday, the widest since 2005, Bloomberg reported. When near-dated metal costs far more than later-dated metal, it usually means buyers need copper now.

Then a heavyweight trader joined in. According to Bloomberg, Trafigura has spent the past two weeks approaching producers and traders in Asia to buy large volumes for November and December, and has been willing to outbid rivals. Trafigura declined to comment.

Copper cathode at Uralelectromed (UMMC). Photo: Niklitov, CC BY-SA 4.0, via Wikimedia Commons.

It Is a Supply Problem, Not a Demand Boom

Don’t mistake this for a Chinese demand boom. “The demand indicators are fairly lackluster, so it does point to supply issues being the cause of the tightness in the Chinese market,” Morgan Stanley metals strategist Amy Gower told Bloomberg. Chinese smelters are short of mined concentrate and scrap. In the Democratic Republic of Congo, China’s biggest source of refined copper, a crackdown on illegal mining has seen the government seize more than 500 trucks and several thousand tonnes of copper and cobalt.

The squeeze is already causing damage downstream. Shanghai Metals Market reported Monday that some processors have banked furnaces and cut line utilization because the premiums are too expensive. Delayed import cargoes also started arriving, and the average Shanghai spot premium fell 240 yuan to 2,375 yuan a tonne. That is still very high. SMM put Shanghai social inventory at about 33,000 tonnes, near the lowest since its data began. The November SHFE contract stops trading on November 16, and deliverable warrants are thin.

Copper anode rejects. Photo: PennyBrowns23651, CC BY-SA 4.0, via Wikimedia Commons.

The 733,000-Tonne Elephant in America

Here is the contradiction. MINING.COM reports that COMEX depots hold 732,943 tonnes, more than double a year ago, after two years in which miners and traders sent metal to the U.S. ahead of possible import tariffs. ADM Investor Services says COMEX holds nearly 70% of the copper stocks monitored by the three major exchanges. Counting U.S.-based LME stocks, the U.S. share is close to 90%.

The tariff still hasn’t happened. The White House’s July 2025 copper proclamation told the Commerce Secretary to report by June 30, 2026, so the President could decide whether a phased duty on refined copper is warranted: 15% from January 1, 2027, and 30% from January 1, 2028. The Congressional Research Service notes that the Section 232 copper tariffs did not cover cathodes, ores, concentrates or scrap. The 50% duties hit semi-finished products and copper-intensive derivatives instead.

Bloomberg reports that, on paper, China’s premiums and spreads are now big enough to pay for shipping copper from the U.S. back to China. The catch is that those cargoes could be worth far more in America if a tariff arrives. “For it to happen I think you’d need tariffs to be definitively ruled out,” Gower said. Her base case is that U.S. stocks will be “quite sticky” and drawn down mainly through lower imports.

The Midterm Wildcard

That is where last week’s election matters. A Democratic sweep in the midterms reduced the odds of Trump’s planned refined-copper tariffs and raised the risk of tighter data-center restrictions, Reuters reported. That threatens both the AI demand story and the tariff stockpiling that supported prices this year. Citi cut its three-month copper forecast to $13,300 a tonne from $14,500 and warned that a pullback in U.S. tariff expectations was “likely to prompt risk-off behaviour.” MINING.COM reported that TD Securities also sees further downside as tariff expectations fade.

The LME’s own data point the same way. Copper stocks rose from 225,425 tonnes on October 16 to 317,400 tonnes on November 9, while cash copper settled at $14,030, below its $14,822 close on October 12.

Miners Ripped Anyway

Equities didn’t wait for an answer. Freeport-McMoRan ($FCX) climbed 5.8% in early-afternoon New York trade Monday, Southern Copper ($SCCO) gained 6.0% and Teck ($TECK) rose 5.9%, according to MINING.COM. Less than a week earlier, Freeport’s board approved a $4.5 billion expansion at Bagdad, Arizona. The company says the project would lift output to more than 400 million pounds of copper a year, with first production targeted for mid-2030 and break-even economics at about $4.00 a pound copper.

Copper rod. Photo: Niklitov, CC BY-SA 4.0, via Wikimedia Commons.

Our Take (Opinion)

This section is opinion, not fact or advice. Copper is caught in a tug-of-war between politics and physics. Physics: Chinese smelters can’t get enough feed, and Shanghai’s shelves are nearly bare. Politics: almost three-quarters of a million tonnes sit in U.S. warehouses as a bet on a tariff that may never come. If Washington clearly kills the refined-copper tariff, we think that U.S. stockpile becomes the market’s swing supply, and the China premium could deflate fast. If the tariff survives, the squeeze outside America could get worse before it gets better. Either way, we think the flat price matters less than the spreads right now. Watch the Yangshan premium, SHFE backwardation into the November 16 expiry, and any word from the White House on refined copper. Long-term bulls get a sanity check from $FCX: a major U.S. producer is committing $4.5 billion to a project it says breaks even near $4.00 copper, well below Monday’s $6.34. That cushion is real, but so are the political crosswinds. Size positions accordingly.

Disclaimer: This article is for informational purposes only and is not investment advice. Commodity futures and mining equities are volatile, can involve leverage and can lose value quickly. Prices cited are as of the dates and times noted in the linked sources. Do your own research and consider consulting a licensed financial adviser before making investment decisions.

Copper’s Great Standoff 🟠🔥 China Is Scrambling for Metal While 733,000 Tonnes Sit in U.S. Warehouses