Copper just blew past record highs, dismissing recent recession fears as stimulus optimism in China and potential U.S. tariffs spark a rush into the red metal.
Copper futures traded at the New York Mercantile Exchange rallied 1.6% to $5.17 per pound on Tuesday, notching historical records.
Often dubbed “Dr. Copper” for its reputation as a proxy for global industrial health, the metal has surged as traders bet on a brighter economic outlook in China and react to tariff risks.
“Tariff threats, tightening supply, and stimulus-fueled optimism for an economic rebound in China have underpinned a rally in copper,” said Adam Turnquist, chief technical strategist for LPL Financial.
“Beijing’s pro-growth agenda is beginning to show up in the economic data, evidenced by recent better-than-expected retail sales, industrial output, and fixed-asset investment,” he added.
Turnquist indicated markets are already “front-running” the potential copper tariff ordered under former President Donald Trump’s direction, even though an official recommendation isn’t expected until later this year.
Bloomberg data shows that between 100,000 and 150,000 metric tons of copper are en route to the U.S., the highest inbound volume on record. That flood of demand has pushed the COMEX copper premium over LME copper to its highest point ever, indicating intense physical buying interest in the U.S. market.
David Goldman, head of trading at Novion Global, also pointed to dollar weakness as a factor boosting copper prices.
“Whilst LME copper is up around 14% from the start of the year, COMEX prices have seen a 27% jump, prompting traders and producers to move supplies to the US,” he said.
“The price squeeze is also being replicated on the Shanghai Futures Exchange, where the front month spread is trading at levels not seen since December 2023.”
Adding further momentum is a shift in tone out of Beijing. Goldman Sachs analyst Daan Struyven said, “China sentiment has turned notably more positive” thanks to the government’s focus on boosting household consumption, lower-than-expected U.S. tariffs and a surge of investor excitement around artificial intelligence.
Importantly, Struyven flagged reports that China’s State Reserve Bureau plans to replenish copper stockpiles in 2025. While not purely opportunistic, this buying could cushion any price-sensitive demand drop in China.
“We remain structurally bullish,” said Struyven, who sees the LME’s ongoing tightening and strong electrification trends driving prices higher in the months ahead.
The price move has also broken a key technical level.
According to LPL Financial’s Turnquist, copper futures have surged past the highs of 2021–2022, completing a “head and shoulders” bottom pattern that hints at more upside ahead.
Speculative flows are also favoring the bulls. Hedge funds and other large speculators have largely unwound their short positions, while long bets have picked up in recent months, supporting the momentum.
That enthusiasm has spilled into equity markets. Freeport-McMoRan Inc. FCX, one of the world’s largest copper producers, has climbed 13% in March, on track for its best monthly performance in a year. Southern Copper Corp. SCCO is also up 12% over the same period, riding the wave of investor optimism.
Traders looking for broad copper exposure may consider the Global X Copper Miners ETF COPX, which has historically showed strong rallies April. Over the past 15 years, the ETF has gained an average of 4.5% during the month — its strongest seasonal trend of the year.
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