Copper fell to its lowest price in almost four months on Friday and was headed for a fifth straight weekly loss, even as the metal available inside China, its biggest consumer, kept shrinking. Three-month copper on the London Metal Exchange slipped below $13,500 a metric ton, its weakest level since mid-July, Reuters and Seeking Alpha reported. Seeking Alpha said the losing streak was the longest in nearly two years, and Reuters put the weekly decline on course to be the steepest since the week ended March 20.

The split between paper prices and physical supply matters for Asian buyers and producers. The Yangshan premium, which Chinese importers pay on top of the London price, rose to $285 a ton on Friday, up $45 from the previous session, according to Shanghai-based data provider SMM; Reuters also reported the $285 level and called it a record. A week earlier the premium had set a record at $217.50, Reuters reported at the time.

Why copper prices are falling

The selling has come from financial markets rather than from metal users. Goldman Sachs tied the drop to a sell-off in AI-related shares, which deepened late in the week. Investors have bought copper as a bet on data centers and electrification, so the metal has moved with those stocks since the U.S. midterm elections on Nov. 3. Goldman said the decline reflected investor positioning, not weaker fundamentals, and pointed to low inventories and limited supply in China, where premiums are high, Reuters reported.

Copper peaked at a record $14,875 a ton on Sept. 10, according to Shanghai-based data provider Mysteel. Friday's price is roughly 10% below that high. Expectations of a Federal Reserve rate increase in December, which Mysteel said rose after strong U.S. jobs and inflation data, have added to the pressure. Mysteel said the next Federal Open Market Committee meeting, on Dec. 8 and 9, is one of the dates traders are watching. In an analysis published Nov. 6, Mysteel analyst Zhaorui Cui described the slide as "a collapse of expectations, not a collapse of reality."

China's copper market is tight

Inside China, the picture is the opposite of a glut. In the previous week, copper stocks in Shanghai Futures Exchange warehouses fell more than 24% to 33,848 tons, the lowest in almost three years, Reuters reported at the time. SMM said on Friday that domestic inventory remained low ahead of the next contract delivery.

Two forces are draining metal from Asia. The first is the United States. Expectations of U.S. tariffs on refined copper pulled cargoes toward American warehouses this year, and more than 70% of LME stocks sat in U.S. warehouses as of Nov. 5, according to SMM. Mysteel said the tariffs had been expected from Jan. 1, 2027, but that timing is now in question.

The second is smelting. China's smelters are short of ore, and Mysteel said a negative benchmark processing fee in next year's contracts would confirm how tight concentrate supply has become. Mysteel estimated November refined output at about 1.05 million tons, down 7.7% from a year earlier, with maintenance and feedstock shortages costing about 90,000 tons a month in the fourth quarter.

Chinese imports of copper cathode fell 16.3% in the first nine months of the year to about 2.14 million tons, SMM said, and tracked cathode stocks stood at about 62,600 tons on Nov. 5, less than half the 134,400 tons a year earlier. The shortage of ore has also shown up in trade data: China's copper concentrate imports fell 11% in October.

What it means for miners in Asia

For producers that sell into China, the physical market gives some cushion against the futures sell-off, since Chinese buyers are paying record premiums for prompt metal. Supply from some of the region's key sources is also falling short of plans: Ivanhoe Mines this month cut its 2027 forecast for the Kamoa-Kakula complex it co-owns with China's Zijin Mining, whose output goes mainly to China.

For smelters, the squeeze runs the other way. Scarce ore leaves little margin, and Mysteel said the industry's year-end negotiations over 2027 concentrate contracts are another event the market is watching.

The nearest test for Chinese supply comes on Monday. SMM said the Shanghai exchange's November copper contract stops trading on Nov. 16, with delivery due on Nov. 17 and 18, which leaves less metal for spot buyers in the meantime.