Price trend
According to data monitored by the SunSirs, copper prices fluctuated widely in January. At the beginning of the month, the price of copper was 99,180 RMB/ton, and by the end of the month, it had risen to 104,496.67 RMB/ton, representing an overall increase of 5.36%, and a year-on-year increase of 34.05%.
According to the price chart from SunSirs, copper futures prices were initially higher than spot prices in October. The main contract represents the expected price two months in the future, suggesting a weak outlook for future copper prices.
Market analysis
According to LME inventory data, LME copper inventories experienced a slight decrease in January. By the end of the month, LME copper inventories stood at 174,975 tons, a 22.75% increase compared to the beginning of the month.
Macroeconomic factors: In January, the Federal Reserve maintained interest rates unchanged, and the market still expects two interest rate cuts in 2026, with the first potentially delayed until the second quarter. The U.S. dollar index fell below 96, reaching a four-year low, supporting the prices of dollar-denominated commodities and boosting demand by lowering the cost of purchasing non-U.S. currencies.
Supply side: Global copper mine production growth was only 0.9%, with frequent accidents such as the Mantoverde strike in Chile and the Grasberg mudslide in Indonesia. ICSG predicts a supply deficit of 800,000 to 1 million tons in 2025. China's dependence on imported copper concentrate exceeds 90%, and long-term contract treatment charges (TCs) had fallen to $0/ton. Policies were promoting a dual strategy of "overseas cooperation + recycling," aiming for recycled copper to account for 28% of total supply by 2028. Smelters faced production cuts due to low processing fees. In December, domestic refined copper production reached 1.326 million tons (a 9.1% year-on-year increase), but social inventories accumulated to 225,900 tons; COMEX inventories exceeded 550,000 short tons, indicating a suction effect from the US market.
Downstream: New energy vehicle sales reached 19 million units (a year-on-year increase of 15.2%), with each vehicle using 83 kg of copper; accelerated construction of ultra-high voltage power transmission lines and AI-driven demand added over 1 million tons to copper demand. However, high copper prices were suppressing downstream purchasing, and in January, domestic electrolytic copper inventories increased to 327,500 tons, with spot premiums turning into discounts, indicating weak market sentiment. The effects of the Chinese New Year holiday were becoming apparent, with processing companies gradually closing for the holidays and demand for raw materials weakening.
According to the annual price comparison chart from SunSirs, copper prices in February have generally risen more often than they have fallen over the past five years.
Market outlook:
In summary, copper prices have shown resilience amidst the macroeconomic tug-of-war between bullish and bearish factors. In the short term, caution is warranted regarding potential pullbacks from high levels, while in the medium to long term, demand from the new energy sector, low interest rates, and geopolitical risk premiums will support an upward shift in the copper price range. Copper prices are expected to fluctuate widely in February.
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