Chinese copper buyers have effectively gone on strike at LME prices above $13,000 per tonne. The world's largest consumer imported only 454,000 tonnes in January-February 2026, a 25% year-on-year decline, as demand evaporated at elevated futures prices. The standoff between speculative-driven LME pricing and physical demand reality defines the current market.
SHFE copper stocks surged to record levels in early 2026, hitting approximately 301,000 tonnes before moderating. Global visible stocks exceed 1.39 million tonnes, the highest in nearly two decades. Despite physical abundance, LME futures remain elevated, sustained by institutional investors.
Chinese smelters have shifted to exporting refined copper into the price strength, sending surplus metal to LME warehouses globally. Chinese-origin metal now accounts for a significant share of LME inventory builds, particularly in Singapore and US port locations.
The Yangshan import premium recovered from $20/tonne in January to approximately $65/tonne, but remains well below the $89/tonne level of early 2025. LME prices would need to fall to $10,500-11,000/tonne to stimulate Chinese re-stocking.
Current LME prices incorporate a substantial speculative premium disconnected from Chinese physical demand. Buyers with flexible sourcing should monitor SHFE inventory drawdowns as the trigger for renewed import demand.
Current LME prices incorporate a substantial speculative premium disconnected from Chinese physical demand. Buyers with flexible sourcing should monitor SHFE inventory drawdowns as the trigger for renewed import demand.