Key Moments
- The London Metal Exchange index recently stood near 5,400, around 4% below its late-January record peak.
- Copper on the Shanghai Futures Exchange briefly exceeded RMB 100,000 per ton – more than USD 15,000 – before retreating.
- Open interest in Shanghai copper futures and options has dropped back to roughly last year’s average, coinciding with a 4.5% price pullback since the end of January.
China’s Diminishing Role in Global Metal Demand Growth
Commerzbank analysts Barbara Lambrecht and Volkmar Baur note that copper and the wider base metals complex have retreated from their recent highs, with China exerting a less dominant influence on global metals demand growth than in the years before the pandemic.
“Base metals rose slightly again over the last two trading days, but at around 5,400, the London Metal Exchange index was still almost 4% below its record high at the end of January. In the run-up to the Chinese New Year, during which the stock exchanges will be closed from next Monday, activity is likely to slow down: according to a survey by the consulting firm Mysteel, some companies in the copper industry in the south of the country already halted production at the end of January and do not intend to resume until March.”
“The research group Bloomberg Intelligent (BI) notes that China’s share of global metal demand growth has fallen significantly: From 2020 to 2025, the country accounted for only an estimated 60% of the increase in metal demand, whereas before the pandemic, from 2008 to 2020, China’s contribution to growth was 137%, compensating for declining demand elsewhere.”
Shanghai Price Spike and Transmission to London
The Commerzbank commentary highlights that a sharp, speculation-driven rally in Chinese copper futures briefly set new records and spilled over into international pricing.
“At the end of January, copper prices on the Shanghai Futures Exchange rose to a record high of over RMB 100,000 per ton, pushing up prices on the London Metal Exchange as well. In Shanghai, a ton cost the equivalent of more than USD 15,000, which contributed to the record prices on the London Stock Exchange.”
| Market / Metric | Recent Level / Change | Context |
|---|---|---|
| London Metal Exchange index | Around 5,400 | Almost 4% below record high at the end of January |
| Shanghai Futures Exchange copper price | Over RMB 100,000 per ton | Record level at the end of January, equivalent to more than USD 15,000 per ton |
| Shanghai copper price move since end of January | -4.5% | Decline as speculative activity eased |
| China share of global metal demand growth (2008-2020) | 137% | Offsetting weaker demand in other regions |
| China share of global metal demand growth (2020-2025, estimated) | 60% | Significantly lower contribution versus pre-pandemic period |
Speculation, Open Interest, and the Pullback
According to the Commerzbank report, the dramatic price action in Shanghai was closely tied to speculative positioning in derivatives.
“According to reports, the price rally in Shanghai was primarily driven by speculative investments in metals. Evidence of this can be found, for example, in the sharp rise in the number of open contracts for futures and options on copper on the Shanghai Futures Exchange, which also reached a multi-year high.”
The subsequent reversal has been accompanied by a notable reduction in those positions.
“Over the past 10 days, the number of open futures contracts and options on copper in Shanghai has fallen significantly again and is currently back to around the average level of last year. As a result, the price of copper in Shanghai has also fallen by 4.5% since the end of January, contributing to the decline in prices in London.”
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