China’s Metals Frenzy Gives Copper a Historic Spike
Copper just printed one of its wildest sessions in more than a decade.
Prices surged as much as 11%, briefly clearing $14,500 per ton for the first time on record, before pulling back sharply later in the day as the dollar strengthened and broader markets turned risk-off. The move comes as copper is already up roughly 21% since early December, reigniting the “structural copper bull” narrative investors have been waiting years to see play out.
China Drove the Initial Wave
The rally’s timing matters: the sharpest part of the move hit during Asian hours, when Chinese traders dominate metals flows.
On the London Metal Exchange, copper jumped more than 5% in under an hour during early-morning London time — a window that often signals China-led momentum trades. Meanwhile, activity on the Shanghai Futures Exchange has surged, with January already shaping up as a record month for base-metals volume. Copper itself logged one of its biggest daily trading volumes ever.
Multiple market voices pinned the move on speculative money rather than fundamentals.
Momentum Is Winning — Even as Demand Signals Stay Mixed
Copper has been a favorite “AI + electrification” macro trade because it sits inside almost every power and compute buildout: data centers, grid upgrades, EVs, wiring, transformers, you name it.
But what’s notable here is that the price surge is happening despite signs of weaker physical demand in China and market signals that imply near-term supply is not extremely tight (such as a widening contango). That gap — price action ripping higher while fundamentals lag — is exactly what you see in a momentum-led squeeze.
And once momentum takes over, the market can overshoot fast.
Why the Macro Backdrop Is Fueling It
This copper move isn’t isolated. It’s part of a broader “real assets” wave being pushed by:
- A weaker U.S. dollar, which lifts commodity prices and boosts non-dollar buying power
- Hard-asset rotation across metals (not just copper)
- Rate-cut expectations, which support commodities broadly
- AI + chips + power infrastructure spending, keeping long-term demand expectations elevated
That same wave has been lifting other commodities across the board.
Volatility Is Back — And It Cuts Both Ways
This wasn’t a clean breakout. It was a spike.
Prices ripped higher, then retraced quickly — including a sharp intraday drop once U.S. trading began. Some analysts are already warning that physical buyers could pull back at these levels, forcing a reset even if the longer-term thesis stays intact.
Translation: the trend may still be up — but the path is going to be messy.
WSA Take
Copper is behaving like a market that’s front-running a structural shortage — and using speculative leverage to do it.
China-driven momentum, a weak dollar, and AI-era infrastructure spending are all hitting at once. That’s how you get historic spikes. But when copper goes vertical, it rarely stays smooth — pullbacks are part of the trade.
If the macro tailwinds stay in place, copper remains a headline asset for 2026. Just don’t confuse a straight-line candle with a straight-line market.
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