Copper Gains as Chinese Traders Return

Copper futures jumped nearly 2% toward $5.9 per pound on Tuesday, reversing losses from the previous session as traders in mainland China returned from the extended Lunar New Year holiday. Optimism over potentially lower US tariffs supported the rally after the US Supreme Court struck down President Donald Trump’s reciprocal tariffs. Even with Trump threatening to raise global tariffs from 10% to 15% in response to the ruling, China is still expected to face lower average levies on its metal-intensive exports. However, higher physical prices have raised concerns that top consumer China could curb purchases, pushing exchange-tracked inventories to their highest levels since 2024. Stockpiles in both London and New York have also been on the rise.

Copper futures hovered above $5.8 per pound on Monday, but struggled to cling onto gains from earlier in the session as shifting US trade policies unsettled global markets. On Saturday, US President Donald Trump said he would raise the 10% global levy announced a day earlier to 15%, following the US Supreme Court's rejection of his sweeping reciprocal tariffs, adding fresh uncertainty to the economic outlook. Tariffs typically dampen global growth, curbing demand for commodities, but pressure on the dollar from Trump’s announcements provided some support to copper and other metals. Investors also monitored expectations for higher trading volumes this week as Chinese markets reopen after the extended Lunar New Year holiday. Copper and other metals had surged sharply in January before being sold off, largely fueled by speculative activity among Chinese traders.

Copper futures stayed below $5.75 per pound on Friday, poised for a fourth consecutive weekly decline amid rising global inventories and soft industrial demand. Stocks in LME-tracked warehouses increased for the 26th straight session, reaching an 11-month high. Combined inventories across Shanghai, London, and New York also surpassed 1 million tons, the highest since 2003. Trading volumes remained thin, as Chinese markets were closed for the Lunar New Year holiday. Copper and other metals had surged sharply in January before retreating, largely driven by speculative activity among Chinese investors. The metal also faced pressure from a stronger dollar, as robust US economic data and hawkish signals from the Federal Reserve prompted traders to scale back expectations for aggressive easing.