Copper Falls as Lunar New Year Holiday Begins

Copper dropped nearly 1% to around $5.75 per pound on Monday, extending last week’s losses as mainland Chinese investors were away for the week-long Lunar New Year holidays, keeping trading volumes low and economic activity subdued. Other Asian markets, as well as the US, were also closed for public holidays. The metal had reached record highs above $6.5 per pound in late January amid speculative buying from Chinese investors, before falling as much as 15% as sentiment reversed. Still, copper remains supported by ongoing supply disruptions and strong global demand from power grids, data centers, and electric vehicles. This demand puts major industrial players, including China, the US, Canada, Europe, and India, in competition to secure supplies.

Copper climbed back above $5.8 per pound on Friday after losing 3% in the previous session, as investors continued to grapple with heightened volatility in metals and broader financial markets. Thursday’s decline lacked a clear catalyst, though simultaneous losses in equities and cryptocurrencies point to forced liquidations, likely amplified by algorithmic trading. Attention is now turning to the upcoming US inflation report, which could shape expectations for Federal Reserve policy. Copper also faces pressure from anticipated weaker near-term demand in China, the world’s largest consumer, as economic activity slows ahead of the Lunar New Year holidays. Nonetheless, ongoing supply disruptions and robust global demand, driven by the energy transition and continued expansion of AI-powered data centers, continue to underpin prices.

Copper decreased 2.03% to 5.8445 USD/Lbs