Copper Shrugs Off Global Gloom as Chinese Buyers Squeeze Supply

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(Bloomberg) — The global copper market is flashing signs of tightness, as strong Chinese buying squeezes scant supplies even in the face of worries about a looming industrial downturn.

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It’s a counterintuitive dynamic: copper is typically seen as a bellwether for the global economy — and expectations for growth are being rapidly downgraded due to the trade war between the US and China, and other countries around the world.

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Yet while copper prices plunged in early April after US President Donald Trump unveiled his so-called reciprocal tariff regime, they have since rebounded – helped by strong buying from China, according to numerous traders and industry executives. Since the start of the year, copper on the London Metal Exchange is up more than 8%, while the S&P 500 is down more than 4%.

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“China’s copper demand indicators still look healthy for now,” analysts at Morgan Stanley said in a note. “The physical copper market looks tight.”

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China is by far the world’s biggest copper market, making its buyers the most important driver of the market. A major question for the coming weeks is whether the recent tightness will prove to be only a blip before the full force of trade turmoil hits China’s factory sector. 

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Apparent demand growth in China has been running near double—digit levels this year, a pace that cannot continue, according to Wei Lai, vice head of trading at Zijin Mining Investment Shanghai Co., a unit of China’s top copper miner.  “Demand will slow in the second half along with output,” he said.

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Wired Up

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For now, traders point to several areas of demand strength.

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Strong orders from State Grid Corp. of China, the world’s single largest buyer of copper, have spurred buying by the wire and cable makers that supply the power giant. Grid spending in the first three months of 2025 rose 25% on the year, and investment in new equipment rose by 60%.

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Production of copper-intensive goods, from air-conditioning units to electric vehicles, has also been rising, according to Morgan Stanley. Purchasing of home appliances was up 16% during the five-day holiday at the start of May, ANZ Group Holdings Ltd. wrote in an emailed note.

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When prices slumped to their lowest since 2023 amid the financial-market chaos that followed Trump’s unveiling of reciprocal tariffs, Chinese buyers siezed on the price drop to snap up material. The LME saw its highest hourly volume in nearly a decade, while some merchants notched up record weekly sales.

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Kathleen Quirk, chief executive officer of US copper miner Freeport McMoRan Inc., told investors that despite the negative sentiment around tariffs, “the facts are that copper demand remains strong globally.”