Copper prices have continued their downward spiral after reaching record highs, leaving market participants wondering if optimistic Chinese investors will resume buying amid a series of disruptions that have shaken global metal markets.
The industrial metal’s price plummeted by 4.2%, settling at $12,600 per ton on the London Metal Exchange, accompanied by sharp declines in aluminum, tin, nickel, and silver prices. Copper, which had climbed to an all-time high of over $14,500 per ton last Thursday, dropped below $13,000 during Friday’s trading, reflecting extreme volatility across both base and precious metals in recent weeks.
From Record Highs to Sharp Declines
The recent downturn comes after a strong rally fueled by increased demand from China’s investors, who had poured funds into commodities amidst skepticism over the strength of the U.S. dollar and a shift away from sovereign bonds. However, Friday marked the start of a massive sell-off after former U.S. President Donald Trump nominated Kevin Warsh, known for his hawkish stance on inflation, to lead the Federal Reserve—a move that rattled markets.
Adding to the turbulence, the copper market has been adjusting to a remarkable 40% surge in futures contracts throughout 2025. This rally was driven by supply disruptions at mines, speculation about energy transition demand, and potential U.S. tariffs on imports.
Despite the recent sell-off, analysts believe the macroeconomic factors supporting the copper rally remain intact over the medium and long term.
Chinese Investors Eye Opportunity Amid Price Correction
In China, discussions of capitalizing on the price dip have been widespread on social media platforms and chat groups over the weekend. Analysts do not rule out the possibility of a new rally in copper prices.
Gao Yin, an analyst at Shuohe Asset Management, noted that some funds are exiting the market to mitigate risks ahead of the Lunar New Year holiday, which begins later this month. However, he emphasized that the fundamental economic drivers of the current rally remain unchanged, and Chinese investors remain optimistic about future price increases.
January saw record trading activity in the Shanghai Futures Exchange, with copper trading volumes reaching an all-time high on Friday amid the sell-off.
Contrasting Signals: Weak Manufacturing vs. Strong Investment
Copper remains an attractive investment due to solid demand forecasts and supply shortages. However, last week’s price spike coincided with sluggish manufacturing activity in China.
According to industry insiders, manufacturing companies have been slow to increase purchases despite falling prices, partly due to preparations for the upcoming Lunar New Year holiday. This highlights a stark contrast between weak consumer demand and the fervent activity of speculative investors.
The decline in manufacturing activity, observed in December, has further contributed to concerns about the disconnect between copper market prices and the underlying industrial demand.
A “Supercycle” in the Making
Despite the current volatility, some analysts see the correction as a buying opportunity. Li Yao Yao, a researcher at Xinhu Futures, described the recent dip as a “window for purchasing,” emphasizing that copper is entering a “supercycle” characterized by sustained high prices.
Copper futures traded on the Shanghai Futures Exchange are expected to range between 100,000 yuan ($14,385) and 150,000 yuan per ton this year, according to Xinhu. On Friday, copper futures in Shanghai closed at 100,110 yuan per ton, down 3.4%.
Meanwhile, other metals also faced losses, with aluminum prices dropping 2.8%, tin plunging over 8%, and iron ore falling 0.3% to $103.35 per ton in Singapore.
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