Copper Retreats From Record Peak as Traders Lock In Gains

Key Moments

Speculative Rally Unwinds, but Monthly and Weekly Gains Hold

Copper prices declined on Friday as investors took profits following a sharp speculative surge in the previous session. Despite the pullback, the metal remained on course to finish the month and the week with solid gains.

The most-active copper contract on the Shanghai Futures Exchange (SHFE) closed daytime trading down 2.82% at 103,680 yuan ($14,919.70) per metric ton. The contract retreated from its all-time high of 114,160 yuan but still ended January up nearly 4%.

On the London Metal Exchange (LME), benchmark three-month copper dropped 2.78% to $13,278.50 a ton, easing back from a record level of $14,527.50. Even with the session’s decline, London copper was still set to close the week with gains near 7%.

Broader Metals Sell-Off and Dollar Strength Weigh on Prices

Copper’s move lower occurred alongside a wider retreat across both precious and base metals after a record-setting rally. Gold and silver edged lower, and all base metals recorded losses during the session.

A stronger dollar contributed additional pressure on metals prices, amplifying the impact of profit-taking across the complex.

Chinese Demand Signals Under Strain at Elevated Price Levels

Concerns about demand, particularly in China, added to the downside in copper. Record-high prices for the red metal raised questions about consumption in the world’s largest market.

The Yangshan copper premium – a gauge of Chinese appetite for imported copper – stood at $23 a ton on Thursday and remained below $25. This compared with levels above $40 at the start of January, indicating softer buying interest.

In the domestic Chinese market, spot copper traded at a 170 yuan per ton discount to the SHFE copper price. That discount pointed to subdued demand for copper, which is widely used in construction and power applications in China.

Analyst View: Risk-Off Positioning Amid Constructive Longer-Term Outlook

Copper’s reversal was seen as part of a shift in market sentiment. Copper’s pull-back “reflected a broader shift into risk-off positioning”, analysts at ING Economics said in a note.

At the same time, analysts maintained a positive structural view on the metal: “The underlying backdrop for copper and the wider metals complex remains constructive. Expectations of a weaker dollar, anticipated rate cuts, firm investor appetite for real assets, and persistently tight supply-demand conditions continue to provide support.”

Policy Uncertainty: Market Watches Fed Chair Nomination

In the background, investors were also monitoring developments in U.S. monetary policy leadership. The market was awaiting U.S. President Donald Trump to announce his nominee for the Federal Reserve Chair, a decision he said he intended to announce on Friday.

Performance Across SHFE and LME Base Metals

Base metals on both the Shanghai Futures Exchange and London Metal Exchange moved mostly lower alongside copper.