LME WEEK-Copper pricing fragments as markets regionalise, CME says
LME WEEK-Copper pricing fragments as markets regionalise, CME says By Pratima Desai and Tom Daly
LONDON, Oct 23 (Reuters) - Global copper trading is becoming increasingly regionalised, with prices in New York and Shanghai reflecting diverging local supply and demand fundamentals and potential policy changes, CME Group's top metals executive said.
Even though the London Metal Exchange is still seen as the global benchmark for copper CMCU3, its dominance is being challenged by US-based Comex, part of the CME Group CME.O, and the Shanghai Futures Exchange.
"We're living in a world where the market is becoming more and more regionalised and fragmented ... the reality is that one price fits all isn't effective," Jin Hennig, global head of metals at CME Group, told Reuters in an interview on the sidelines of LME Week.
The shift also reflects a copper market increasingly divided by the threat of tariffs on US imports, which took Comex copper HGc1 prices to a record $6.83 a lb - or $15,057 a metric ton - on September 22, a gain of 50% since the start of 2025.
Since US President Donald Trump ordered a probe into the potential for tariffs in February last year, copper prices on Comex have typically traded above those on the LME, owned by Hong Kong Exchanges and Clearing 0388.HK.
This has created a price differential or arbitrage in favour of Comex copper that has incentivised traders and producers to ship large amounts of the metal - needed for electric vehicles, grid infrastructure and construction - to the US.
In China, meanwhile, traders and producers are being encouraged to use ShFE prices, which industry sources see as more representative of the market in the world's largest producer and consumer of refined copper.
"The Shanghai Futures Exchange represents the China price and Comex copper represents the US duty-paid price," Hennig said. "It works nicely in terms of giving a market a tool to assess and look at regional structure and regional balances."
It also creates arbitrage trading opportunities between Shanghai, New York and London, she added.
"Our job as a marketplace is to provide participants an opportunity to express their view... that's what our copper price represents."
Industry sources say it will be hard for the more than 700,000 tons of copper in Comex-registered warehouses to flow back out unless LME prices are significantly higher than Comex or European premiums - paid on top of LME prices for physical metal - rise enough to encourage shipments.
(Reporting by Pratima Desai and Tom Daly; editing by Elaine Hardcastle)
((pratima.desai@thomsonreuters.com; +44 207 513 5681;))