Copper Slump Deepens as Traders Wait for China Bulls to Step In

Rolls of copper sheets at Revere Copper Products in Rome, New York, US, on Wednesday, Aug. 6, 2025. US President Donald Trump went ahead with 50% tariffs on copper imports but exempted refined metals, which are the mainstay of international trading. Photographer: Lauren Petracca/Bloomberg Photo by Lauren Petracca /Bloomberg

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(Bloomberg) — Copper extended a slump from a record, as traders debated whether bullish investors in China might start buying again after a tumultuous few days that have rocked global metals markets.

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The industrial metal sank as much as 4.2% to $12,600 a ton on the London Metal Exchange, as aluminum, tin, nickel and silver also posted steep declines. Copper had spiked to a record above $14,500 last Thursday, before plunging below $13,000 a ton in intraday trading on Friday.

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Metals — both base and precious — have been extremely volatile in recent weeks. They faced an initial leg higher, underpinned by a surge in interest among investors in China, where funds piled into the commodities amid doubts about the dollar and a shift away from currencies and sovereign bonds. Then, the selloff on Friday was triggered as US President Donald Trump named Kevin Warsh — known as a tough inflation fighter — to lead the Federal Reserve.

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The volatile trading came on the heels of a heady year for copper, with futures surging more than 40% in 2025 following mine snarls, speculation about demand from the energy transition, and the possibility of US import tariffs.

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The latest outsized moves surprised seasoned observers, with some traders stepping back, citing heightened risks and a disconnect with softening physical markets. But inside China, talk of dip-buying still filled chat groups and social media over the weekend and analysts are not ruling out another swing higher.

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“Some funds are exiting ahead of the Lunar New Year to avoid risk amid such high volatility,” said Gao Yin, an analyst at Shuohe Asset Management Co., referring to the annual break that starts later this month. “But the medium- to long-term logic behind this round of rally remains intact. There is a unanimous, bullish consensus among Chinese investors.”

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January was the busiest month ever for metals trading on the Shanghai Futures Exchange, and copper volumes surged on Friday to a record amid the sharp selloff. Copper is viewed as an attractive bet because of a strong demand outlook and tight supplies, but last week’s spike came even as manufacturing activity in China stalled.

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Industrial Outlook

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On the industrial side, buying by fabricators remains muted despite the price slump, according to traders with knowledge of the industry, who declined to be named given business confidentiality. Purchases slowed also because many users were going to close during the Lunar New Year, they said.

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That contrast — between soft on-the-ground consumption and huge investor activity — was underscored by the unexpected deterioration in China’s factory activity in December, according to data on Saturday. Copper bulls have based optimism more on other macro factors, including easier global monetary policies, a softer dollar and a surge in fiscal spending in developed economies.

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“The near-term correction will provide a good window to buy,” Li Yaoyao, an analyst at Xinhu Futures Co., wrote in a note. Copper is entering a “supercycle” of sustained high prices and could trade between 100,000 yuan ($14,385) and 150,000 yuan a ton this year in Shanghai, according to Xinhu.

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On the SHFE, copper last traded at 100,110 yuan a ton, down 3.4%. 

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In London, copper fell 4.2% to $12,601.50 a ton on the LME at 12:05 p.m. in Singapore after ending 3.4% lower on Friday. Aluminum lost 2.8%, while tin was down by more than 8%. Iron ore, meanwhile, dipped 0.3% to $103.35 a ton in Singapore.

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—With assistance from Winnie Zhu.

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