Robert Friedland
@robert_ivanhoe
Founder @IvanhoeMines_ | @IvanhoeElectric | Everything affects everything, everywhere, all the time 🌎
353 Following 49.4K Followers
This morning the Yangshan premium reached $205 per tonne (+30% in less than a week) to a new ALL TIME HIGH.
The lack of copper supply is real.
Following up on yesterday's post, here is what the 12-month chart looks like for the Yangshan premium, which yesterday hit a RECORD $178 per tonne of copper. That record broke again this morning. This tells us that despite all the macro noise, nothing has changed in the PHYSICAL world.
The Yangshan copper premium is the extra cost paid over the benchmark London Metal Exchange (LME) price to import refined copper into China.
The RECORD premium signals a lack of available short-term supply, strong domestic demand and low local warehouse inventories.
China is the world's largest consumer of refined copper, accounting for ~60% of global consumption. This problem is not unique to China, as other major economies around the world also face the same reality when they try to get their hands on copper metal... they have to pay up.
The copper market only wants to react upwards when the physical market globally is tight and shows no signs of easing.
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The AI data center buildout is not just a software or capital investment story. It’s quickly becoming a physical infrastructure challenge, and the supply of materials and equipment is paramount in determining how quickly we can build.
If we want the US to become a leader in superintelligence, we first need to become a leader in the underlying commodities required to build the technology.
This technology requires more than capital and chips. We need transmission lines (copper), transformers (grain oriented electrical steel), fuel cells (scandium), and many more critical minerals that the US is fighting to procure. The future of AI doesn’t begin in a lab, it starts in the ground.
A great article on data center risk from AIxEnergy:
@aixenergy
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Following up on yesterday's post, here is what the 12-month chart looks like for the Yangshan premium, which yesterday hit a RECORD $178 per tonne of copper. That record broke again this morning. This tells us that despite all the macro noise, nothing has changed in the PHYSICAL world.
The Yangshan copper premium is the extra cost paid over the benchmark London Metal Exchange (LME) price to import refined copper into China.
The RECORD premium signals a lack of available short-term supply, strong domestic demand and low local warehouse inventories.
China is the world's largest consumer of refined copper, accounting for ~60% of global consumption. This problem is not unique to China, as other major economies around the world also face the same reality when they try to get their hands on copper metal... they have to pay up.
The copper market only wants to react upwards when the physical market globally is tight and shows no signs of easing.
Show more
Each year during LME week the world’s leading metals traders come through London. Over the course of the week, a consensus is typically formed on what is the short- to long-term outlook for each metal.
Often the consensus is right, but sometimes it is wrong (e.g last year’s consensus was to be short zinc… and over the past 12 months it has been one of the best performing commodities). This year was probably the first year in a while where a consensus view on copper was not unanimously agreed upon.
The bears talked down data-centre/AI trade demand, saying it won’t meet expectations… while the bulls talk to the shortage of copper supply… no matter the demand outlook. Eitherway, the week ended with ‘risk-off’ selling of equities and commodities.
Copper finished the week at $6.50 per pound… only ~5% below its all-time high. Also by the end of the week, copper cathode premiums into China reached a RECORD high of $158 per tonne (up again this morning to $178 per tonne)… premiums set by @codelco for delivery into Europe were a RECORD $350 per tonne…. And Europe’s biggest copper smelter, @Aurubis_AG, increased its 2027 premium by +10% to a RECORD $347 per tonne.
Also… spot copper treatment and refining charges (TC/RCs) reached a RECORD NEGATIVE $300 per dry tonne of concentrate smelted and 30 cents per payable pound of copper refined (“-300/-30”) last week… and we expect to hear news soon of a RECORD low for next year’s annual TC/RC benchmark. We are hearing the 2027 benchmark may settle around NEGATIVE 150/15 (the previous record is this year’s 0/0)… We will know for sure by the end of CESCO Shanghai Week in mid-November.
The trend of RECORD HIGH copper premiums and RECORD LOW TC/RCs is a CLEAR indicator of imminent shortages in copper supply.
So… to echo the comments made by Max Layton of @Citi on copper, “we view any associated risk off-episodes as good long-term buying opportunities.”
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This Cliffside Italian Village Was Named the Happiest Place to Travel in Europe—and It Has Colorful Houses and Pebble Beaches.
Story link in Travel & Leisure 👆
It’s certainly our Happy Place 💙
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The Payne Institute at the Colorado School of Mines has been a thought leader in our industry for decades. Its latest work on the copper investment gap is another important contribution to the conversation about where this market is heading. I encourage you to give it a read 👇
We’ve all seen the headline numbers: hundreds of billions of dollars in investment are needed to close the copper mine supply gap. This CSM report estimates that the world needs to develop an additional 16.1 million tonnes of annual mine supply by 2050, at a conservatively estimated cost of $360 billion in new mine investment. It’s clear we have a massive hill to climbs as it relates to capital requirements for copper mining.
Importantly, however, the report highlights that capital alone is not the only variable. Capital intensity has risen as the industry works vigorously to develop new supply. But the low hanging fruit is gone. The question is whether future copper prices, regulatory approvals and the cost of capital will support an environment that allows our industry to mobilize the supply needed to meet the world’s growing appetite for copper.
@coschoolofmines
@MBazilian
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Each year during LME week the world’s leading metals traders come through London. Over the course of the week, a consensus is typically formed on what is the short- to long-term outlook for each metal.
Often the consensus is right, but sometimes it is wrong (e.g last year’s consensus was to be short zinc… and over the past 12 months it has been one of the best performing commodities). This year was probably the first year in a while where a consensus view on copper was not unanimously agreed upon.
The bears talked down data-centre/AI trade demand, saying it won’t meet expectations… while the bulls talk to the shortage of copper supply… no matter the demand outlook. Eitherway, the week ended with ‘risk-off’ selling of equities and commodities.
Copper finished the week at $6.50 per pound… only ~5% below its all-time high. Also by the end of the week, copper cathode premiums into China reached a RECORD high of $158 per tonne (up again this morning to $178 per tonne)… premiums set by @codelco for delivery into Europe were a RECORD $350 per tonne…. And Europe’s biggest copper smelter, @Aurubis_AG, increased its 2027 premium by +10% to a RECORD $347 per tonne.
Also… spot copper treatment and refining charges (TC/RCs) reached a RECORD NEGATIVE $300 per dry tonne of concentrate smelted and 30 cents per payable pound of copper refined (“-300/-30”) last week… and we expect to hear news soon of a RECORD low for next year’s annual TC/RC benchmark. We are hearing the 2027 benchmark may settle around NEGATIVE 150/15 (the previous record is this year’s 0/0)… We will know for sure by the end of CESCO Shanghai Week in mid-November.
The trend of RECORD HIGH copper premiums and RECORD LOW TC/RCs is a CLEAR indicator of imminent shortages in copper supply.
So… to echo the comments made by Max Layton of @Citi on copper, “we view any associated risk off-episodes as good long-term buying opportunities.”
Show more
⚠️The world’s copper refiner is cutting back.
🇨🇳China refines about 48% of the world’s copper, 14m tonnes in 2025.
Now its smelters plan deeper output cuts.
The squeeze comes from both sides.
Concentrate is so tight that spot treatment charges turned negative this year, so smelters are now paying miners to process their ore.
The byproducts that used to cover the loss are weakening, with sulfuric acid down 11% in September alone.
China’s top smelters had already pledged to cut 2026 output by more than 10%.
Seven planned 30–60 days of maintenance for October and November.
Mines were already the bottleneck.
Now refining is too.
If China refines less, the world gets less copper wire.
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When our industry talks about future copper demand we focus on the topics of global data centre buildout, Chinese industrial output, government stockpiling, rearmament and defence … However, we forget about the silent, rapid urbanisation of India as a major source of demand.
According to the Government of India’s Vision Document on Copper (interesting read, link below 👇), they expect domestic copper demand to more than double in the next 10 years to 4-5 million tonnes per annum… and then double again in the following 10 years to 9-10 million tonnes per annum.
India produced less than 30,000 tonnes of primary copper supply last year… and there is very little chance that domestic supply can increase to meet the RAPID growth in projected domestic demand. To quote a statistic in the Vision Document; “India copper concentrate imports are expects to reach 91%-97% by 2047.”
That's ONE new Kamoa-Kakula EVERY YEAR for the NEXT 20 YEARS.... just for India's consumption. Where is this copper coming from?
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India’s copper demand grew 12% to 2.1 million metric tons in the year to March 2026, outpacing the country’s 7.7% GDP growth.
Data centers made up less than 1% of it, according to the International Copper Association India.
Infrastructure led instead, rising 29% and accounting for 22% of domestic consumption. Automotive demand rose 14% after a sluggish FY2025.
Growth accelerated from 9.3% the year before.
Source: ICA India via The Economic Times
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China’s copper cathode premium soared to an all time record high of $158 per tonne today.
At a time when the market is questioning copper demand linked to AI capex deployment, the world’s largest copper consuming economy, BY A MILE, is signaling that it is starving for material. With the majority of global exchange stocks sitting in the US, China is sending an extremely strong signal of tight physical availability, showing it is willing to pay up to ensure metal is brought into the country.
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Congratulations to Ivanhoe Mines President & CEO Marna Cloete on her election as Chair of the Board of the International Copper Association.
@CloeteMarna's appointment reflects her leadership and commitment to advancing the global copper industry. As Africa’s role in meeting growing global copper demand continues to expand, collaboration across the industry will be essential to supporting responsible production and copper’s role in a more sustainable future.
We look forward to seeing Marna help lead @ica_copper in its important work to champion copper worldwide.
Congratulations, Marna! 👏
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The foundation of the last metals supercycle (2002 - 2011) was the rapid industrialisation of China… new cities, skyscrapers, railways, cars, power grids and the mass creation of a new middle class. Back then, it was a DEMAND story.
The supercycle we are in today, is bigger, more global… and what makes it different is that it’s a SUPPLY story.
The economies that will be left behind are those that are unable to secure their own critical minerals supply chain.
The statement made in this article by Canada’s Natural Resources Minister, Tim Hodgson, comes after @BloombergNEF’s forecast that copper needs $332 BILLION of new mine investment to avoid a deficit starting in 2028… otherwise we face a shortfall of about 20 million tonnes (44% of demand) by 2050.
We are in discussions with other authoritative sources that tell us that the @Bloomberg estimate is significantly too conservative. We will bring attention to these studies when they are published.
New mines take decades and decades to find, permit, finance AND THEN build. One major obstacle for projects, especially those located in western economies, is permitting. Unfortunately, there is no quick fix... and permitting should not be rushed. At least, the growing panic for metals is forcing into public debate the topic of where ON EARTH these metals will come from.
As they say at the Colorado School of Mines: Earth first... we will mine the other planets later.
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A modern jet engine is a cocktail of different alloys, compounds and superalloys using many of the little-known critical elements across the periodic table.
These critical elements are the backbone of our modern, high-tech industries, especially in aerospace and defence… and because they take years to develop, they cannot simply be replaced with something else overnight.
The yttrium compound used in jet engines is called yttria-stabilized zirconia (yttrium oxide combined with zirconium dioxide), which is a ceramic coating applied as a thermal barrier on nickel-based superalloy turbine blades.
No yttrium means no jets…
These minor metals have major consequences when they are no longer available.
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As we discussed, Joe, earlier this month on Odd Lots, it’s getting increasingly difficult to build all these data centres at the same time… there just isn’t the depth in the supply chain.
The COMEX/LME premium is widening again. The 3-month is ~$230 per tonne and the 6-month is ~$480 per tonne, as copper prices trend higher again this morning.
Copper is trading around $14,470 per tonne today, which is ~$400 per tonne (~3%) below its all-time high....despite no news on tariffs and the first Fed rate hike in 3 years. Copper is on course for a weekly gain of ~3%. This is because physical buying has STRENGTHENED this past week.
The Yangshan premium, the amount paid above the London Metal Exchange (LME) price to import copper cathode into China, has increased to $124 per tonne today... the highest level since November 2022 (chart below 👇). And, the COMEX continues to trade at a premium to the LME (the 3-month is ~$140 per tonne & the 6-month is ~$400 per tonne).
This is not surprising...
Governments worldwide are investing heavily in grid infrastructure, rearmament and defence... while hyperscalers are racing to be the first with the largest data-centre capacity. There will continue to be significant buyers of physical copper, whether the Fed continues to hike or not.
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We need to mine as much copper in the next ~20 years, just to maintain 3% global GDP growth, as we've mined in all of human history... No small feat.
There is expected to be a big shortfall in copper form 2027, per FT:
Something I heard recently from a US electrical infrastructure manufacturing exec:
"I'd rather have copper in my warehouse than cash in the bank, because based on what I'm seeing in supply chains, I'm concerned that cash may not be able to secure me actual copper at some point."
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Copper is trading around $14,470 per tonne today, which is ~$400 per tonne (~3%) below its all-time high....despite no news on tariffs and the first Fed rate hike in 3 years. Copper is on course for a weekly gain of ~3%. This is because physical buying has STRENGTHENED this past week.
The Yangshan premium, the amount paid above the London Metal Exchange (LME) price to import copper cathode into China, has increased to $124 per tonne today... the highest level since November 2022 (chart below 👇). And, the COMEX continues to trade at a premium to the LME (the 3-month is ~$140 per tonne & the 6-month is ~$400 per tonne).
This is not surprising...
Governments worldwide are investing heavily in grid infrastructure, rearmament and defence... while hyperscalers are racing to be the first with the largest data-centre capacity. There will continue to be significant buyers of physical copper, whether the Fed continues to hike or not.
Show more
According IEA, global copper demand is rising, while supply from existing and announced projects is projected to fall short.
That makes developing new, high-quality copper resources increasingly important.
Kamoa-Kakula is part of the answer. It's one of the world’s highest-grade major copper mines with production set to ramp up to more than 500,000 tonnes annually from 2028.
$IVN
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Anthropic plans to build a 2.14 gigawatt data centre in Australia.
Using the assumption from Helen Amos at @BMO that 35,000 tonnes of copper goes into each gigawatt of data centre capacity… the copper required for this data centre alone will be approximately 10% of Australia’s annual copper production.
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Mirae Asset Global Investments is launching its first copper-focused ETF trading on the Hong Kong Stock Exchange, opening up the opportunity for Asian investors to buy listed copper miners.
Mirae is the company behind the highly successful Global X Copper Miners ETF (COPX), which has ballooned in size to $7.4 billion in assets and owns 2.6% of @IvanhoeMines_ & ~1% of @ivanhoeelectric
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