Copper prices recovered some of their ground after a sharp sell-off during Asian trading hours, as signs emerged that Chinese buyers, previously deterred by high prices, were returning to the market. London Metal Exchange copper futures pared their intraday losses to around 2%, after having plummeted as much as 5.7% earlier to touch $12,414.50 per metric ton. Other base metals also suffered heavy losses, with tin falling up to 11.3% and nickel dropping 8.1%. Last month, fueled by market doubts about the US dollar's trajectory and capital flowing out of foreign exchange and sovereign bond markets, bullish Chinese investors poured into the commodity market, driving copper and other metals to record highs. However, during this rally, Chinese manufacturing enterprises significantly slashed their procurement. The timing of when these firms will return to the market to replenish inventories has now become a central concern for investors. Earlier in the day, copper prices on the Shanghai Futures Exchange hit the daily downside limit. However, prices rebounded above 100,000 yuan per ton after the night trading session commenced at 9 p.m. local time on Monday. "Short-term adjustments will present a good buying window," wrote Xinhu Futures analyst Li Yaoyao in a research note. Xinhu Futures believes copper is entering a sustained high "super cycle," projecting that SHFE copper prices this year could trade between 100,000 yuan (approximately $14,385) and 150,000 yuan per ton. Copper futures had a red-hot year in 2025, surging over 40% driven by factors including mine supply disruptions, speculative demand related to the energy transition, and potential US import tariffs. Monday's sharp price swings occurred against this backdrop. The magnitude of this price volatility has surprised seasoned market observers, leading some traders to exit positions as risks escalated and market movements appeared disconnected from weakening physical demand. Domestically, however, discussions about buying the dip flooded social media platforms and investment chat groups over the weekend, and analysts have not ruled out the possibility of copper prices surging again. "As the Spring Festival holiday approaches, some funds are choosing to exit early to avoid risks amid the current high volatility," said Shuohe Asset Management analyst Gao Yin. The Lunar New Year holiday begins later this month. "But the medium- to long-term rationale for this copper price rally remains intact, and domestic investors share a highly unified bullish consensus on copper prices." January marked the most active month on record for metal futures trading volume on the Shanghai Futures Exchange, with turnover hitting a new high even as copper prices tumbled last Friday. At 3:53 p.m. London time, LME copper was trading at $12,860 per ton, down 2.3%, after having closed 3.4% lower on Friday. Aluminum fell 2.7% over the same period, while tin declined 9.8%.
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