On Friday, September 18, 2026, a Chinese buyer paid $124 a tonne over the London price to land copper at the port of Yangshan.
That premium has risen 72% this month, to its highest level in nearly four years, Reuters reported on Friday.
The Yangshan premium is the cleanest read there is on whether China actually wants imported metal, because nobody pays it unless a smelter or a rod mill is waiting at the other end.
Copper prices followed it up. Three-month metal on the London Metal Exchange rose 0.2% to $14,521 a tonne on Friday morning, after touching $14,572.50, and was up 2% on the week, back within 2.4% of the record $14,875 set on September 10.
We told you on September 14, in Washington Blinked on Copper, that the selloff was the market dumping the copper price rather than the tariff, and we called it the opening, if there was one. The metal has since taken most of it back, and it has done so for a reason almost nobody was trading a month ago.
So we want to show you what China started paying, why the 696,631 tonnes stacked in American warehouses cannot answer it, and what the world's biggest producer is quietly failing to dig out of the ground.
What China Started Paying
The Fed raised rates on Wednesday, September 16, for the first time since 2023, and signalled more to come. Higher rates raise the cost of carrying industrial metal, which normally hurts copper.
So why did copper prices rise anyway, 1.2% in Thursday's official rings and again on Friday?
Because Chinese buyers came back to the market, and Alastair Munro of Marex told Reuters that this was real physical buying rather than speculation, even if the volumes were not, in his word:
"massive"
You can see it in three separate prices, none of which a hedge fund can talk up. The Yangshan premium reached $118 a tonne on Wednesday, its highest since October 2022, then $121 on Thursday and $124 on Friday, according to SMM. Domestic premiums paid over Shanghai futures climbed to 645 yuan a tonne on Wednesday, the highest since December 2023. And when Reuters reported the buyers' return, Shanghai exchange stocks stood at 54,780 tonnes, the least since January 2024, after three straight weeks of drawdown.
Goldman Sachs went and measured the demand itself rather than the price of it, telling clients that Chinese consumption of copper, aluminium and flat steel ran 1% to 2% higher year on year in the first half of September.
The bank added one detail that China's mills will feel long after this week, which is that domestic scrap supply is tight enough to delay smelters coming back from maintenance.
In other words, China cannot make up the difference from its own scrap heap, so it has to import, and it is willing to pay a four-year-high premium to do it. A stronger currency helps, because the yuan closed Friday at its firmest against the dollar since mid-2022, which makes every dollar-priced tonne cheaper in Shanghai.
The Tonnes That Cannot Come Home
The metal China wants exists. It is sitting in the wrong country.
Stocks in COMEX warehouses stood at 696,631 tonnes in the week to Friday, against the 696,413 we counted on September 10. In eight days, on a pile that took fifty-three consecutive days of deliveries to build, the net movement was 218 tonnes.
Why has none of it left?
Reuters gave the mechanical answer in a single clause, which is that the premium of US copper futures over LME prices has:
"narrowed to levels insufficient to encourage physical shipments with the White House yet to decide on refined copper tariffs."
A year of traders shipping metal to America was paid for by the gap between New York and London, and that gap covered freight, insurance and financing. With the gap gone, moving a tonne back across the Atlantic now costs more than the tonne gains on arrival, so the copper sits exactly where the trade left it.
Meanwhile the warehouses that serve everybody else are emptying. Available copper in LME-registered sheds fell to 139,650 tonnes on Friday after 4,500 tonnes of fresh cancellations in Asia, mainly Taiwan and Hong Kong. A cancellation is metal booked for physical removal, which is the last step before it disappears into a factory.
Add the two exchanges the rest of the world can actually draw on, London and Shanghai, and you get 195,723 tonnes against America's 696,631. Does that look to you like a market with a surplus?
Where the world's exchange copper sits
Tonnes in exchange warehouses, week to September 18, 2026
Source: Reuters daily exchange data, September 18, 2026
| Label | Value |
|---|---|
| COMEX (United States) | 696631 |
| LME available | 139650 |
| Shanghai | 56073 |
And the tariff that moved all of it was never signed. Clause seven of the July 2025 proclamation only asked Commerce for an update by June 30, 2026, so the President could decide on a 15% duty on refined copper from January 1, 2027. That deadline passed almost three months ago, the decision has still not been made, and the metal moved anyway.
Chile Is Making Less of It
Now we want to put the supply side next to the Chinese bid, because warehouses only tell you where copper is today, and say nothing about how much more of it is coming.
Chile digs roughly a quarter of the world's mined copper, and in July its production fell 9.4% year on year, on Cochilco figures reported by SMM.
BHP's Escondida, the largest copper mine on earth, produced 89,400 tonnes that month, down 22.1%. State-owned Codelco managed 112,800 tonnes, down 5%. Only Collahuasi, run by Anglo American and Glencore, grew, and its extra 4,000 tonnes were nowhere near enough to cover the hole.
Chile's statistics bureau put July mine copper output at 403,424 tonnes, with its mining production index down 7.2% on the year.
That July number sits on top of a second quarter that was already the weakest April to June in Chilean data going back nineteen years, at 1.27 million tonnes, down 7.7%.
So Cochilco cut its own forecast. Chile will produce about 5.27 million tonnes this year, a 2.6% decline, before a hoped-for recovery to 5.55 million in 2027, and the commission blamed Codelco and BHP's Chilean operations by name.
What does a shrinking Chile do to a market where the biggest single stockpile is frozen inside a country that will take years to work through what it already holds?
It means the marginal tonne China needs has to come out of a mine, and there are fewer of those tonnes this year than last.
Beijing has been buying the mine rather than the cargo elsewhere in the metals complex too. We showed you on September 18, in The Three Percent Beijing Is Buying, what it looks like when China decides it wants a position in a metal rather than a cargo of it.
The Miners Have Not Caught Up
The metal has recovered. The equities that dig it have not.
Freeport-McMoRan (NYSE: FCX) closed at $71.54 on Friday, against $76.23 on September 9, the day before the tariff story broke, per Nasdaq. That leaves it 6.2% below where it started this episode, while copper prices are only 2.4% below their record.
Southern Copper (NYSE: SCCO) closed at $195.70 against $209.26, down 6.5%. Teck (NYSE: TECK) closed at $65.52 against $70.34, down 6.9%. Ero Copper (NYSE: ERO), the smallest and most geared of the four, closed at $34.17 against $38.25, down 10.7%.
All four have climbed since the Fed hiked on Wednesday. Ero has gained 5.9% in two sessions and Freeport 3.3%.
So what is the gap between the metal and the miners? It is the market still pricing a Washington signature that no longer sets the copper price. Southern Copper never had a COMEX premium to lose, because it mines in Peru and Mexico and sells into a world that is now short of available metal, and it fell as hard as Freeport did.
Our read is that the names without a COMEX premium are now the cleaner way to own this. Southern Copper, Teck and Ero sell their pounds into the market China is bidding for, so a four-year-high Yangshan premium reaches their realised price without anyone in Washington signing anything. Freeport still holds the option on a tariff that may yet arrive, and it is the only one of the four with something real to lose if the answer comes back a flat no.
What would tell us we are wrong? A Yangshan premium back under $80 by the end of October, or a COMEX count that finally starts falling week after week.
The risk on the other side is real, and we would rather you held it in view than discovered it later. If Chinese restocking turns out to be a holiday trade ahead of Mid-Autumn and National Day, the premium fades in October and the bid goes with it. And if the White House rules the tariff out loud, the last of the New York premium goes to zero and some of that American metal eventually finds a route back out.
Let's put the whole picture in one place:
- China is paying $124 a tonne over London to import copper, a four-year high, and 72% more than at the start of September.
- Goldman measured Chinese demand up 1% to 2% year on year in early September, with scrap too tight to substitute for imports.
- 696,631 tonnes sit in COMEX warehouses and moved by 218 tonnes in eight days, because the New York premium no longer pays the freight.
- Available LME stocks are down to 139,650 tonnes and Shanghai holds 56,073, which leaves the rest of the world 195,723 tonnes to work with, though Shanghai did rebuild 2.4% this week.
- Chile's July output fell 9.4%, Escondida fell 22.1%, and Cochilco now expects a 2.6% decline for the full year.
- Copper prices sit 2.4% below the record while the four big copper equities sit 6% to 11% below their September 9 closes.
What to Watch, and When
September 24. Xi Jinping arrives at the White House for his first visit in a decade, and Reuters reports that traders are watching for a mutual tariff reduction covering $30 billion of goods. A thaw would make the Chinese bid more durable.
November 10. The tariff truce struck in South Korea last October expires. If it lapses without an extension, every industrial metal reprices on the threat of a second trade war, and the copper stranded in America becomes a good deal less comfortable to own.
The daily exchange counts. Available LME stocks below 139,650 tonnes, with fresh cancellations in Asia, tell you the squeeze outside America is tightening. The first sustained week of COMEX draws would tell you the opposite, that the stranded metal has found a way out.
Cochilco's next monthly print. August and September output will show whether Chile's second half recovers the way the commission is counting on. Another 9% month and the 5.27 million tonne forecast goes with it.
For a year the copper price traded on what one government might sign.
This week it traded on what a Chinese smelter was willing to pay.
Seek the truth and be prepared,
Equedia
Sources
- Reuters via Business Recorder, Active demand in China sets copper on track for weekly gain
- Reuters via Business Recorder, Copper rallies as Chinese buyers return to the market
- SMM, China's physical demand recovers, Yangshan copper premiums rise to near four-year high
- SMM citing Cochilco, Chile July copper output falls 9.4% year on year, Escondida slumps 22.1%
- Reuters via Mining.com, Chile copper output to fall 2.6% in 2026 before rebound, Cochilco says
- Bloomberg via Mining.com, Chile posts weakest copper output for second quarter in 19 years
- The White House, Adjusting Imports of Copper into the United States
- Reuters, What will Trump and Xi discuss in Washington next week?
- Nasdaq, Freeport-McMoRan historical data
- The Equedia Letter, Washington Blinked on Copper
- The Equedia Letter, The Three Percent Beijing Is Buying
Disclaimer: This letter is for informational and educational purposes only and does not constitute investment advice. Past predictions and performance are not indicative of future results. Please see our full terms of use and disclaimer at equedia.com.
