Copper futures traded above $6.45 per pound on Wednesday, extending gains after a more than 3% jump in the previous session, as tightening supply in top consumer China underpinned prices. The premium on imported copper in China rose to $100 per tonne, its highest level since May of last year, after Beijing’s crackdown on VAT fraud curtailed the availability of scrap and boosted demand for refined copper imports.
Adding to the supply squeeze, copper inventories across China have continued to fall, while a series of temporary smelter maintenance shutdowns further restricted output. At the same time, stockpiles in LME warehouses declined to their lowest level since March, as traders drew down inventories for shipment to the Chinese market.
In contrast, Comex-monitored copper inventories in the United States climbed to a record high, with shipments increasingly redirected there in anticipation of possible US import tariffs.
