Shanghai copper drops as SHFE raises margin requirements, demand remains poor

Copper prices in China fell on Wednesday after Shanghai Futures Exchange raised margin requirements for some copper contracts.

The most-traded copper contract on SHFE dropped 0.65% to 100,580 yuan ($14,440.15) a metric ton, as of 0330 GMT.

The benchmark three month copper on the London Metal Exchange, however, gained 0.65% to $12,836.50 a ton.

SHFE said on Tuesday that it would increase margin ratios and widen daily price limits for some metals including copper, aluminum, gold and silver futures contracts from the settlement on January 22.

Such a move was widely seen installed to stabilize the market as copper has seen sharp price swings in recent weeks, after a record-setting rally in 2025.

Shanghai copper gained 1.58% so far this year, after setting a record of 105,870 yuan a ton.

Copper was also under pressure from sluggish demand from consumers as price remained elevated.

The Yangshan copper premium, a gauge of Chinese demand for imported copper, was at $26 a ton on Tuesday, the lowest since late July, 2024.

In the domestic market, copper premium has flipped to a discount of 150 yuan a ton, also indicating a lack of buying interest for copper in the spot market.

But the red metal was still supported by expectations of tight supply outside the US market due to tariff treats and mine disruptions.

Elsewhere, tin was the sole gainer among SHFE base metals, with most-active contract up 1.79% to 402,600 yuan a ton while leading gains on the LME, up 2.20% to $50,500 a ton.

Indonesia’s military-backed crackdown on mining activities on illegally cleared forest continued to unnerve the industry, pushing up tin prices.

Among other SHFE base metal, aluminium dipped 0.35%, zinc lost 0.68%, lead shed 0.81% and nickel tumbled 1.16%.

Elsewhere on LME, aluminium rose 0.64%, zinc added 0.33%, lead gained 0.27%, and nickel climbed 1.08%.