Glencore Taps Russian Copper to Ease Supply Crunch in China
Glencore Plc is purchasing Russian copper from the London Metal Exchange (LME) and preparing to ship it to China, underscoring tightening supply conditions in the world’s largest copper-consuming nation.
Over the past three trading sessions, about 15,000 tons of copper have been requested for withdrawal from LME warehouses in Rotterdam, drawing available inventories to their lowest level in a year, according to exchange data.
People familiar with the matter say Glencore is behind these withdrawals and intends to deliver the Russian-origin copper to China.
This move is notable given the widespread reluctance to trade in Russian metals since the full-scale invasion of Ukraine in 2022 and subsequent partial sanctions imposed by the US and UK.
Russian copper has since accumulated in LME warehouses—particularly in Europe—where nearly all available inventory is of Russian origin.
Despite this surplus, buyers have generally avoided it due to its geopolitical sensitivity and distance from China, one of the few major markets still open to Russian materials.
Spokespeople for both Glencore and the LME declined to comment on the trade.
Glencore’s decision appears to be a response to severe market tightness in China, driven in part by former U.S. President Donald Trump’s tariff threats on copper imports.
These threats prompted a surge of copper shipments toward the U.S., exacerbating short-term shortages in China.
As a result, traders—including Glencore’s competitors, Mercuria Energy Group Ltd. and Trafigura Group—have been drawing down LME copper stocks to satisfy Chinese demand.
Chinese copper premiums have soared to five-year highs for certain grades, and the Shanghai Futures Exchange is experiencing a steep backwardation, with near-term contracts priced significantly higher than longer-dated ones—a classic sign of a supply squeeze.
Inventories in China saw a record drop after copper prices dipped below $8,500 per ton in April, although levels have stabilized as prices rebounded.
There may also be a longer-term strategic angle to Glencore’s trade. If peace negotiations between Russia and Ukraine eventually lead to an easing of sanctions, the value of Russian metals on global exchanges could rise.
Bloomberg previously reported that Mercuria made a large bet on Russian-backed LME aluminum in anticipation of such a scenario.
While Glencore stated in 2022 that it would not enter any new trading business involving Russian-origin commodities without government instruction, it, like other traders, has continued to deal in Russian metals already circulating on the LME.
Following the April 2024 sanctions from the US and UK, the LME banned delivery of newly produced Russian copper.
However, previously warehoused Russian metal remains eligible for trade—allowing companies, including those in sanctioned countries, to continue sourcing from existing inventories.
