Glencore buys Russian copper on LME to supply China

According to Bloomberg, Glencore is buying Russian copper on the London Metal Exchange (LME) with the intention of delivering it to China. This indicates a drop in the metal's reserves in the world's largest consumer.

LME data shows Glencore requested the delivery of approximately 15,000 tons of copper from Rotterdam warehouses. Consequently, inventories on the exchange fell to their lowest level in over a year. Typically, traders buying copper in London avoid deals with Russian metal due to its distance from the main market in China. This has led to an accumulation of Russian copper stocks on the LME.

Glencore's decision to use Russian metal is likely a reaction to tight conditions in China's copper market, Bloomberg reports. Earlier, the agency explains, President Donald Trump's threat to impose tariffs on the metal’s imports forced traders to divert huge volumes of copper to the US.

Based on Bloomberg data, premiums for certain grades of the industrial metal in China have reached five-year highs. Additionally, the Shanghai Exchange is showing a sign of a tight market: contracts for immediate delivery are more expensive than those for later delivery.