Copper prices surged more than 4% on the London Metal Exchange (LME) on Tuesday, reaching a session high of $13,531 per ton—a $600 increase. This sharp rebound was driven by renewed optimism following news that China, through the China Nonferrous Metals Industry Association, intends to expand its strategic copper reserves. The announcement solidified confidence in Beijing's strategy to ensure long-term supply security, likely through collaboration with major smelters and potential increases in commercial and concentrate inventories.
The headline quickly reversed early caution in Asia, sparking fresh buying as traders interpreted the announcement as a sign of policy support for industrial demand, said Neil Welsh, head of metals at Britannia Global Markets. According to data from Mysteel, daily physical trade in China has recently doubled to over 38,000 tons, mirroring a similar increase in turnover on the LME.
This rally follows a significant correction where copper prices crashed over 10% from their record peak of $14,500 per ton reached last week on the LME. The sell-off was part of a broader cross-commodity retreat, primarily driven by Chinese bulls pulling back from a turbulent market and speculative unwinding. At the time of writing, the three-month LME contract was at $13,099 per ton, up 1.3% from the previous close.
Despite near-term volatility, analysts emphasize that copper's long-term fundamentals remain robust. "Its fundamentals still look supportive, driven by tight mine supply, constrained growth in key producers, and strong structural demand linked to electrification and AI-related data‑centre build-outs," said Ewa Manthey, commodities strategist at ING Group. The underlying narrative is anchored by the global energy transition, which requires vast amounts of copper for electrification, renewable energy infrastructure, and electric vehicles.
Supply constraints are a key factor. The rising demand is not being met due to a scarcity of new mining initiatives and diminishing copper concentration in ores at operational mines. Furthermore, the market faces potential additional tightening from proposed European Union sanctions. The EU is currently contemplating a ban on importing Russian copper, platinum, rhodium, and iridium as part of a forthcoming package of measures against Moscow. Russia's largest miner, MMC Norilsk Nickel, would be the primary target.
"The potential ban comes at a time when markets for these metals are already tight," Manthey added. Despite a report from the International Copper Study Group predicting a surplus for 2025, expectations are growing for a structural market deficit to emerge as early as 2026 and persist for several years. Global copper demand is projected to increase from roughly 26 million tons currently to 36 million tons over the next decade, according to research from BNEF.
In parallel, precious metals staged a massive rebound. Gold prices on COMEX rose more than 6%, poised for their most significant daily increase since 2008, following a sharp two-day sell-off that saw prices plummet nearly 21% from last week's peak to around $4,400—a near one-month low. The sell-off was provoked by President Donald Trump naming Kevin Warsh as the new Federal Reserve Chair, a strengthening dollar, and widespread profit-taking. At the time of writing, gold was at $4,927 per ounce.
Silver experienced even more dramatic volatility, rebounding 14% on Tuesday after slumping 41% from its peak to a low near $70 per ounce. It was trading at $86.705 per ounce. Investment banks remain bullish on gold, with UBS and JP Morgan forecasting year-end prices between $6,200 and $6,300, and Deutsche Bank projecting $6,000.
Oil prices also found stability, rising nearly 1% after a 4% drop on Monday. The earlier slump followed President Trump's indication of a potential de-escalation with Iran, stating the country was "seriously talking" with Washington. Nuclear talks are set to restart on Friday in Turkey.
