- China’s copper concentrate imports surged 25% YoY (2.9M metric tons in April) as smelters stockpile for new capacity. Domestic smelting capacity has grown 25% since 2021, with another 10% expansion expected in 2025 to meet EV and renewable energy demand.
- U.S.-China tariffs divert shipments to American markets, causing U.S. COMEX inventories to spike 61% while Shanghai stocks plummet 60%. China’s unwrought copper imports stagnate as suppliers prioritize U.S. markets ahead of potential tariffs.
- SHFE copper backwardation widens (2.1% in April vs. 0.75% in March), signaling tight supply and urgent demand. Yangshan copper premium hits $100/ton (highest since 2023), incentivizing rerouted shipments but facing logistical delays.
- China’s stockpiling resembles 2020 pandemic hoarding, but current demand is tied to new smelter operations. Trade tensions echo the U.S.-China trade war of 2018-2019, creating regional inventory disparities and arbitrage opportunities.
- China may expand state reserves to stabilize supply, while smaller manufacturers risk production delays. Geopolitical competition reshapes copper flows, making supply chains a battleground for economic and political influence.
China’s copper imports surged to record highs in April 2025, driven by aggressive expansion of domestic smelting capacity and strategic stockpiling, sparking fears of a global supply crunch. Copper concentrate imports reached 2.9 million metric tons, a 25% increase year-on-year and 22% jump from March, as smelters race to prepare for new facilities set to come online despite existing overcapacity. Concurrently, escalating U.S.-China trade tensions have diverted shipments toward American markets, straining global supply chains and fueling record inventory piles in the U.S. while Chinese warehouses dwindle.
Boom in smelting capacity fuels copper import spree
China’s copper production capacity has surged, up 25% since 2021, with another 10% expansion this year, according to Benchmark Mineral Intelligence. Smelters, anticipating demand for projects like electric vehicle batteries and renewable energy infrastructure, have flooded markets with orders.
“A trader noted that the surging imports are to meet smelters’ capacity expansion plans, as they prepare stocks before commencing operations later this year,” a copper trader told Reuters, highlighting the rush to build reserves amid tight global concentrate supply.
The strategy has paradoxically worsened market imbalances. While China’s copper concentrate imports rose 7.3% year-to-date to 10 million tons, its unwrought copper imports stagnated at 438,000 metric tons in April due to suppliers shifting shipments to the U.S. in advance of potential tariffs.
U.S. tariff fears create stockpile dislocations
The diversion of copper to the U.S. has produced stark disparities. COMEX copper inventories climbed 61% since March to 156,623 tons—the highest since October 2018—as traders sought to pre-empt U.S. import restrictions. Meanwhile, Shanghai Futures Exchange (SHFE) stocks plummeted 60% month-on-month in April to 89,307 tons, reaching historically low levels.
“This situation highlights how political decisions can fragment global markets,” said John Zadeh, commodities analyst, noting that trade policies have disrupted routine flows. The U.S. tariffs have also cut China’s access to critical scrap metal imported from the U.S., once its top supplier of such material, further straining domestic supply. Since 2021, China’s scrap imports have fallen dramatically, forcing recyclers to seek suboptimal overseas alternatives.
Market dynamics signal a supply crisis
The inventory squeeze has intensified price volatility. SHFE copper experienced a sharp backwardation—a condition where spot prices exceed future prices—widening to 2.1% in April, up from 0.75% in March. This structure pushes traders to sell immediately, deepening the drawdown of Chinese stockpiles.
“These premiums reflect the urgency of buyers,” Zadeh explained, referencing the Yangshan copper premium, which rose 43% since late March to $100 per ton, its highest since 2023. The premium incentivizes global sellers to reroute supplies to China, but logistical bottlenecks and shipping costs have slowed the rebalancing process.
A repeat of past supply shocks?
China’s stockpiling strategy mirrors its 2020 response to pandemic-driven supply shortages, when state reserves and corporate inventories swelled. However, analysts note today’s conditions differ. “This isn’t purely about hoarding; it’s about feeding new smelters,” said a metals trader.
The trade tensions also echo the U.S.-China trade war of 2018-2019, when tariffs on Chinese goods led to similar stockpile aberrations. Then, as now, diverging regional inventories created arbitrage opportunities while amplifying price disparities.
Future implications
The crisis underscores vulnerabilities in China’s just-in-time manufacturing model. Electronics, construction and energy sectors face shortages, risking delays in EV production and grid infrastructure. Companies now reconsider inventory buffers.
“Those with access to physical copper will profit,” one strategist remarked, but small and mid-size manufacturers may suffer lost production. Meanwhile, analysts speculate that China could expand state-run reserves to stabilize supplies, similar to its 2020 measures.
As markets brace for potential price spikes, the situation exemplifies how geopolitical rivalries and industrial strategies collide, reshaping global commodity flows. With China’s copper demand projected to remain robust and U.S.-China tensions unresolved, traders and policymakers are watching inventory data closely—a barometer of whether the market’s “perfect storm” will ease or escalate in 2025.
Strategic choices and supply chain adaptations shape copper’s future
The copper market’s current turmoil reflects a broader truth: in a fragmented world, supply chains are no longer mere economic constructs but arenas of geopolitical competition. For China, securing reliable copper supplies is critical to meeting its green energy goals. For global buyers, the calculus now includes not only cost but also political risk. As traders navigate record premiums and tariffs, the path forward is uncertain—and copper’s price swings may foreshadow wider market turbulence.
Sources for this article include: