(Bloomberg) — Copper rose in a volatile trading session, with London Metal Exchange futures jumping on their reopening after the Christmas holiday, extending a strong end-of-year rally as global availability tightened.
Prices increased as much as 6.6% in the initial minutes of trading — the biggest intraday gain since 2022 — to near $13,000 a ton, before later retreating to trade about 1.6% higher by mid-afternoon in London. New York futures fell, erasing much of Friday’s 5% gain while the LME was closed.
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The latest surge caps an extraordinary year for copper, which is headed for its best performance since 2009. The rally has been marked by significant unplanned mine outages, uncertainties over US President Donald Trump’s trade policies and unprecedented pressure on the world’s smelters.
Most recently, the surge has been driven by a renewed rush of shipments to the US, which have drained metal from the rest of the global market. Trump’s plan to revisit the question of tariffs on primary copper in 2026 has revived an arbitrage trade that rocked the market earlier in the year, tightening availability elsewhere even as underlying demand in key buyer China has softened.
Beyond the tariff-driven flows, a deadly accident at the world’s second-largest copper mine in Indonesia, an underground flood in the Democratic Republic of Congo and a fatal rock blast at a mine in Chile have all added more strain to availability of the metal.
At the same time, longer-term demand prospects remain strong, underpinned by electrification trends that require vast amounts of the metal for power grids, energy infrastructure and manufacturing. Investors are also betting that copper consumption will jump further to meet the growing power demands of artificial intelligence.
Industry analysts say much of the richest and most easily accessible mining resources have been exhausted, raising concerns about where new supply will come from over the next decade and beyond to meet forecast growth in consumption.
Still, some analysts warn that prices have climbed too high, especially as underlying usage weakens in China, the top copper consumer.
“It still feels like this is all about expectations,” said Wu Kunjin, head of base metals research at Minmetals Futures Co. Some fabrication plants in China that buy copper and are sensitive to prices have cut output or even halted production following the recent rally, he said.
LME copper traded at $12,350.50 a ton by 1:43 p.m. London time. Other industrial metals were mostly unchanged.