Copper Steadies as Lunar New Year Nears

Copper futures held above $5.90 per pound on Wednesday, maintaining recent gains despite expectations of weaker near-term demand as economic activity in China, the world’s top consumer, slows ahead of the Lunar New Year holidays. Support came from ongoing supply disruptions and robust global demand, driven by the energy transition and continued expansion of AI-driven data centers. The China Nonferrous Metals Industry Association projects refined copper output to rise about 5% in 2026, roughly half the growth seen in 2025. Meanwhile, Goldman Sachs estimates the copper market faced a surplus of 600,000 tons last year, though prices still reached record highs earlier in 2026. On the macroeconomic front, copper benefited from a softer dollar after disappointing US economic data reinforced expectations for Federal Reserve interest rate cuts.

Copper futures fell to around $5.9 per pound on Tuesday, pausing a two-day rebound amid signs of slowing demand in top consumer China ahead of the Lunar New Year holidays. Industrial activity in China slowed as manufacturers paused operations, while overall economic momentum softened. On the supply side, major mines continued to face challenges from power outages, prompting conservative production guidance. The China Nonferrous Metals Industry Association expects refined copper output to rise about 5% in 2026, roughly half the growth seen in 2025. Still, prices remain supported by strong global demand driven by the energy transition and ongoing AI-driven data-center expansion. A weaker dollar, pressured by concerns over declining foreign demand for dollar-denominated assets, also provided additional support.

Copper held near $5.90 per pound on Monday following a week of extreme volatility, as investors balanced persistent supply tightness against signs of weakening demand in top consumer China. Industrial demand in China slowed as manufacturers paused operations ahead of the extended Lunar New Year holidays. Nonetheless, robust global demand driven by the energy transition and data-center expansion continued to support the market. On the supply side, major mines faced ongoing challenges from power outages, prompting conservative production guidance. The China Nonferrous Metals Industry Association projected refined copper output to rise about 5% in 2026, roughly half the growth recorded in 2025. Meanwhile, US Treasury Secretary Scott Bessent attributed last week’s sharp swings in the metals market to Chinese traders, describing the recent rally as a speculative blowoff.