Copper backs off record highs on actual demand concerns

Copper prices hit a record high on Wednesday, supported by sustained demand from speculative funds, although some investors cautioned that elevated price levels could begin to deter industrial buyers.

The benchmark three-month copper contract on the London Metal Exchange slipped 0.1% to $13,176.50 per metric ton by 10:30 GMT, after touching a record high of $13,407 earlier in the session.

Copper prices in London are up around 44% over the past 12 months, driven by mine supply disruptions, concerns over a supply deficit this year, and metal flows into the United States ahead of potential tariff measures, which have tightened availability in other regions.

Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen, said: “With all these concerns about currency debasement, financial risks, and Federal Reserve independence, demand for tangible assets has become very strong.”

He added: “In industrial metals, there is a level at which we reach a point where demand destruction begins. I don’t know exactly where that level is, or whether we’ve already reached it.”

Hansen noted that a close below $13,000 per ton could trigger a corrective downside move in the market.

Copper demand in China appeared stable, with potential stockpiling ahead of the Lunar New Year holiday, according to Hansen.

The most actively traded copper contract on the Shanghai Futures Exchange closed up 0.9% at 104,120 yuan ($14,931.88) per ton, after hitting a record high of 105,650 yuan.

Tin hits record highs

Tin prices in both Shanghai and London reached record levels, with gains of 24% in Shanghai and 30% in London since the start of January, as investors bet on rapid growth in demand for the metal used in semiconductor manufacturing, driven by the artificial intelligence boom.

The Shanghai tin contract jumped 8% to the daily price limit of 413,170 yuan, while tin on the London Metal Exchange rose 4.1% to $51,550 per ton.

Jing Xiao, an analyst at SDIC Futures, said: “We do not see any fundamental change in the tin market. The price surge is mainly being driven by speculative trading.”

Tom Langston of the International Tin Association shared the same view, noting that supply-demand fundamentals remain unchanged, while fund appetite on the London exchange has reached record levels.

Other metals performance

Aluminium on the LME: +0.1% to $3,200 per ton

Zinc: +1% to $3,232

Lead: +0.4% to $2,069

Nickel: +1.7% to $17,975 per ton