Copper Extends Retreat as Focus Turns Back to Soft Fundamentals

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(Bloomberg) — Copper extended its retreat from a record high reached last week as the focus turned back to softening demand following a speculative buying frenzy that saw prices break free from fundamentals. 

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The industrial metal dropped for a third day to around $12,800 a ton on the London Metal Exchange. It’s down 2.9% since last Friday, heading for its worst weekly performance since April. Underscoring the tepid near-term consumption outlook, stockpiles at futures exchange warehouses in London, Shanghai and New York are at the highest since 2003.

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BNP Paribas SA joined banks including Goldman Sachs Group Inc. in warning copper had overshot fundamentals. The metal is “still overvalued” and levels above $11,000 to $11,500 a ton are “almost entirely speculatively driven,” BNP strategst David Wilson said in a note. 

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Copper has been rising since the middle of 2025 on supply outages, a strong long-term demand outlook for the metal that’s critical to the energy transition, as well as the threat of US import tariffs. However, the rally kicked into overdrive late last year as Chinese investors started piling into commodities, even as industrial consumption in Asia’s largest economy weakened, with copper jumping above $14,500 a ton last week.

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The recent selloff in Bitcoin has also weighed on sentiment across wider markets, affecting copper, said Zhou Xiao’ou, an analyst at Zijin Tianfeng Futures Co. Volatility in base metals will likely drop from next week as many Chinese traders will stay on the sidelines before the Lunar New Year holidays, she said.  

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Copper fell 0.9% to $12,793 a ton on the LME as of 11:24 a.m. in Shanghai. Other base metals were also lower, with tin down 2% and nickel falling 1.5%. 

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