Morgan Stanley on copper: The physical copper market looks tight ... In China, inventories are drawing rapidly and the Yangshan premium is rising, both LME and Shanghai copper are in backwardation and treatment charges are turning even more negative, suggesting challenges in sourcing copper concentrate (Codelco cu concs tender this week, - 80/8 TCRC for 2H25, - 40/4 TCRC for 1H26).

After a slow start to the year, China's copper import demand appears to be improving. This can be seen in rising physical premiums (the Yangshan premium is now $93/t, the highest since late 2023), a rebound in refined copper imports in March (+12%), and challenges securing scrap metal which are translating into even lower treatment charges at smelters as they compete to secure copper concentrate.