Copper futures edged lower, settling down 0.1 percent to $13,304.50 a ton on the London Metal Exchange, halting a two-day rally sparked partly by Chinese investor positioning ahead of President Donald Trump's 10 percent global tariffs.
The market awaited the full return of demand from industrial users in China following the Lunar New Year holiday. Chinese fabricators are not expected to restart operations until early next month, contributing to subdued trading volumes.
Privately held copper inventories across China's major consumption centers—Shanghai, Guangdong, Jiangsu, Zhejiang, Chongqing and Tianjin—reached 531,700 tons as of Thursday, the highest level since early 2020, according to Shanghai Metals Market.
Global exchange warehouse stockpiles are also increasing, signaling tepid physical demand. This buildup follows a surge in copper prices to a record high in late January, supported by shifts in U.S. trade policies and mine supply disruptions.
Aces Zhou, a trader at KS Commodities Ltd. said industrial metals currently lack fresh bullish drivers. Manufacturers are resisting high prices in the near term, dampening immediate demand.
Despite the current pause, many investors maintain a long-term bullish outlook on cop anticipating chronic mine-supply constraints and rising usage in electric vehicles, data centers and renewable energy will drive the market into significant deficits.
Olivia Markham, co-manager of the BlackRock World Mining Trust, said copper demand is accelerating due to electrification, rising power consumption, rapid build-out of artificial intelligence-linked data centers and the broader energy transition. Operational disruptions and multi-decade lead times for new projects underpin structural deficits in key base metals, she added. S&P projects artificial intelligence will boost copper demand by 50 percent by 2040.
Thin trading conditions defined the session. The copper-tracking fund CPER closed up 0.03 percent. Southern Copper finished up 3.17 percent at $205.54, while Freeport-McMoRan rose 3.98 percent.
In North China, the average transaction price was 107,830 yuan per metric ton, down 40 yuan per metric ton from the previous trading day. Spot discounts in the region stabilized as traders adopted a wait-and-see approach ahead of the contract rollover window.
