Copper prices in January were predominantly volatile

1. Trend Analysis

According to data monitored by Business Society, copper prices experienced significant fluctuations in January. At the beginning of the month, the price was 99,180 yuan per ton, while by the end of the month, it rose to 104,496.67 yuan per ton, marking an overall increase of 5.36% and a year-on-year rise of 34.05%.
According to the spot-futures chart from Business Society, copper futures prices in October initially exceeded spot prices, with the main contract reflecting an expected price two months ahead, indicating a relatively weaker outlook for copper prices in the future.
According to LME inventory data, LME copper stockpiles showed a slight decline in January. By the end of the month, LME copper inventory stood at 174,975 tons, up 22.75% from the beginning of the month.
Macro perspective: In January, the Federal Reserve kept interest rates unchanged, with the market still expecting two rate cuts in 2026, potentially delayed until the second quarter. The U.S. dollar index fell below 96, hitting a four-year low, which supported commodity prices priced in dollars. The reduced cost of purchasing non-dollar currencies boosted demand.
Supply Side: Global copper mine production growth is only 0.9%, with frequent incidents such as the Mantoverde strike in Chile and the Grasberg landslide in Indonesia. ICSG forecasts a 80-100 million ton shortfall by 2025. China’s copper concentrate import dependency exceeds 90%, with long-term contracts (TC) dropping to $0/ton. Policy-driven dual safeguards of “overseas cooperation + recycled recycling” aim to achieve 28% recycled copper by 2028. Refineries face production cuts due to low processing fees, with domestic refined copper output reaching 1.326 million tons in December (up 9.1% YoY), but social inventories accumulated to 225,900 tons. COMEX inventories exceeded 550,000 short tons, indicating the U.S. siphoning effect.
Downstream sector: New energy vehicle sales are projected to reach 19 million units (a 15.2% year-on-year increase), with an average copper consumption of 83 kg per vehicle. The accelerated construction of ultra-high voltage power grids and AI-driven demand will add over 1 million tons. However, elevated copper prices have dampened downstream procurement, with domestic electrolytic copper social inventory rising to 327,500 tons in January. Spot premiums have turned into discounts, reflecting weak market sentiment. The post-February holiday season effect is evident, with processing enterprises gradually going on leave and weakening raw material procurement demand.
According to the annual price comparison chart, over the past five years, copper prices have risen more often than fallen in February.
In summary, copper prices demonstrate resilience amid macroeconomic bullish and bearish dynamics. Short-term vigilance is warranted against high-level pullbacks, while medium-to-long-term factors—namely demand from new energy sectors, low interest rates, and geopolitical risk premiums—support a higher price equilibrium. Copper prices are expected to primarily fluctuate within a wide range in February.