What's going on? It is rumored that Glencore has purchased a large amount of Russian copper from the LME, and the destination may be China.

There are signs indicating that Glencore may have been buying Russian copper on the London Metal Exchange (LME) recently and plans to ship it to China. This move may be highlighting the ongoing tight supply situation in the global copper market, following the US's earlier "siphoning" of metals like gold and copper earlier this year.

According to exchange data, over the past three trading days, LME's Rotterdam warehouse has received delivery requests for approximately 15,000 mt of copper, reducing available exchange inventory to its lowest level in a year.

Informed sources have revealed that Glencore is the main trader behind these cargo pick-up requests, and the company is planning to deliver these Russian-origin metals to China.

What makes this move unusual is that Glencore's transactions involve a significant amount of Russian copper—a metal commodity that has generally been viewed as the least favored by Western traders in recent years.

Since the outbreak of the Russia-Ukraine conflict in 2022, many consumer enterprises and financial institutions have sought to avoid Russian supplies, especially after the US and the UK imposed additional sanctions in the commodity sector last year.

Traders have said that this has led to a significant backlog of Russian copper in LME warehouses, particularly in Europe, to the point where nearly all LME copper inventory in Europe currently originates from Russia. As these inventories are far from China, the primary market for Russian copper, traders typically avoid these Russian copper inventories when picking up goods from the LME.

In response, analysts suggest that Glencore's move is likely a response to the tight supply and demand situation in the global copper market, particularly when considering the largest consumer market for copper—China.Copper futures on the Shanghai Futures Exchange have recently been in a steep spot premium state, with premiums for certain grades of copper semis reaching their highest levels in over five years.

In March this year, Cailian Press reported that Trump's threat to impose tariffs on imported copper had, in Q1, temporarily led to a significant diversion of metals to the US. At that time, renowned copper industry trader Kostas Bintas pointed out that the transfer of inventory to the US meant that the Chinese copper market would face inventory shortages. Chinese buyers, who account for over half of global demand, would be forced to compete with the US market for resources. Meanwhile, the usual substantial supply of copper scrap flowing from the US has largely dried up.

This situation is now prompting some traders to explore alternative routes, beginning to supply the Chinese market through purchases from LME warehouses. Relevant market sources have indicated that, in addition to Glencore, its competitors Mercuria Energy Group and Trafigura Group have also been drawing down LME copper inventory.