(Bloomberg) — Copper clawed back some losses after a heavy sell-off in Asian trading hours amid signs that buyers in China who’ve been put off by high prices are dipping back into the market.
Contracts were down about 2% on the London Metal Exchange after earlier dropping as much as 5.7% to $12,414.50 a ton. Other base metals also posted big losses, with tin falling as much as 11% and nickel dropping 8.1%.
Copper surged to records along with other metals last month as bullish Chinese investors piled into commodities amid doubts about the dollar and a shift away from currencies and sovereign bonds. But manufacturers in the country cut back purchases sharply during the rally, and when they will step back in and buy is now a key question for investors.
Prices on the Shanghai Futures Exchange rose back above 100,000 yuan a ton as the night-trading session got underway at 9 p.m. local time on Monday, after closing down by the daily limit.
“The near-term correction will provide a good window to buy,” Li Yaoyao, an analyst at Xinhu Futures Co., wrote in a note.
Copper is entering a “supercycle” of sustained high prices and could trade between 100,000 yuan ($14,385) and 150,000 yuan a ton this year in Shanghai, according to Li.
Monday’s volatile trading came on the heels of a heady year for copper, with futures surging more than 40% in 2025 following mine disruptions, speculation about demand from the energy transition, and the possibility of US import tariffs.
The latest outsized moves surprised seasoned observers, with some traders exiting the market, citing heightened risks and a disconnect with softening physical markets. But inside China, talk of dip-buying still filled chat groups and social media over the weekend and analysts are not ruling out another swing higher.
“Some funds are exiting ahead of the Lunar New Year to avoid risk amid such high volatility,” said Gao Yin, an analyst at Shuohe Asset Management Co., referring to the annual holiday that starts later this month. “But the medium- to long-term logic behind this round of rally remains intact. There is a unanimous, bullish consensus among Chinese investors.”
January was the busiest month ever for metals trading on the Shanghai bourse, and copper volume surged on Friday to a record amid the sharp selloff. Copper is viewed as an attractive bet because of a strong demand outlook and tight supplies, but last week’s spike came as manufacturing activity in China stalled.