The London Metal Exchange (LME) copper prices soared to record highs on Thursday, marking the largest single-day increase in over sixteen years. The main contract closed up 9.3%, at $14,301.50 per ton, briefly surpassing the $14,400 mark during the session, setting a new historical high.
This sharp rise mainly occurred during the Asian trading session, with copper prices surging over 5% in less than an hour starting at 2:30 AM London time. The head of non-ferrous metal research at Jianfa Co. analyzed that this round of increase is &#34;entirely driven by speculative funds,&#34; and considering the characteristics of the time period, &#34;it is likely all speculative behavior.&#34;
As a key industrial metal, copper prices have risen approximately 25% since early December. Other base metals also generally strengthened on the same day, with LME aluminum prices rising 1.8% and zinc prices increasing by 5%.
Market analysis points out that this round of commodity price increases in the new year is driven by multiple factors, including the depreciation of the dollar, rising demand for safe-haven physical assets, and geopolitical tensions. Additionally, market expectations for the Federal Reserve to shift towards a more accommodative monetary policy have also provided liquidity support for price increases.
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<h2>Speculative Frenzy Drives Trading Volume Surge</h2>
Speculative trading activity in the futures market has significantly intensified. The trading volume on the Shanghai Futures Exchange surged, with January 2026 becoming the most active month for its six major base metal contracts on record as of last week. Among them, copper contracts recorded the second-largest single-day trading volume in history on Thursday.
Market enthusiasm continues to spread. After the night session opened, SHFE copper futures further rose to 112,000 yuan per ton, having already surged 5.8% during daytime trading on Thursday, closing at 109,110 yuan. Prices of various metals from tin to silver have recently set new record highs, indicating that speculative funds are widely flowing into the commodity market, creating a rotation effect.
Eric Liu, Deputy General Manager of ASK Resources Co., analyzed:
<blockquote>
“The market shows a clear sector rotation characteristic. Copper prices have been consolidating around $13,000 per ton for a long time, and funds have been preparing for this layout for quite some time; the current rise is the result of accumulated expectations being released.”
</blockquote>
<h2>Supply and Demand Signals Diverge from Price Trends</h2>
A noteworthy market paradox is that this round of price surges occurs against the backdrop of some fundamental indicators sending reverse signals. The LME copper futures have seen an expansion of backwardation, a structure that typically indicates a relatively ample supply in the spot market, contrasting sharply with the rapid price increase.
The core logic behind copper's long-standing appeal to investors is that the energy transition and the global expansion of data centers are widely viewed as structurally enhancing its long-term demand. Analysts point out that as long as market expectations for the Federal Reserve to maintain a rate-cutting cycle remain unchanged, the macro logic supporting copper prices will still exist. Regarding how high prices can rise, he believes:
<blockquote>
&#34;As long as the United States continues to invest in artificial intelligence, semiconductors, and grid infrastructure, it will be difficult to make a clear prediction about the peak of copper prices.&#34;
</blockquote>
<h2>Federal Reserve Policy Expectations Provide Support</h2>
Federal Reserve Chairman Jerome Powell stated on Wednesday local time after the interest rate meeting that the outlook for the U.S. economy has &#34;significantly improved,&#34; while the Federal Reserve decided to keep interest rates unchanged. Powell's term will end in June, and the market expects that President Trump may appoint a successor with a more dovish stance, which would enable the central bank to more effectively push for increased interest rate cuts in the future. This potential policy shift expectation provides further monetary easing imagination space for the recent sharp rise in commodities.
However, warnings have also emerged in the market. Trina Chen, co-head of equity trading at Goldman Sachs, pointed out on Wednesday that the current astonishing rise in metal prices may have exceeded the support of actual demand. She warned that as high prices deter physical buyers, the market may face a round of &#34;technical adjustments.&#34; This reveals that beyond the macro narrative and speculative enthusiasm, whether fundamental demand can match current prices has become a key risk variable

The London Metal Exchange (LME) copper futures price on Thursday recorded its largest single-day increase in over sixteen years, soaring 9.3% to a historic high of $14,301.50 per ton. This sharp rise is primarily driven by speculative funds and supported by a weaker dollar and expectations of interest rate cuts by the Federal Reserve

- LME copper prices surged to a record high, ending 9.3% up at $14,301.50 per ton, driven largely by speculative trading, particularly during Asian market hours.  
- This upward trend began in early December with a 25% increase in copper prices, supported by factors such as a weaker dollar, rising demand for physical assets, and geopolitical tensions.  
- Despite the strong price surge, some fundamental indicators suggest ample supply, raising concerns about a potential market adjustment if high prices deter physical buyers.

Wallstreetcn

Hudbay Minerals

ChinaAMC CSI Subdivision Non-ferrous Metal Sub-Industry ETF

iShares Copper and Metals Mining ETF

Guotai CSI Non-ferrous Metal ETF

Teck Resources B

Invesco DB TR Base Metals ETF

ISHRS MSCI Glb Slct Met & Mining

BHP Group Plc

JCCL

Guotai CSI Non-Ferrous Metal Kuangye Theme ETF

Global X Copper Miners

 BHP Group Ltd

Rio Tinto plc

United States Copper Index

Sprott Junior Copper Miners ETF

Sprott Copper Miners ETF

Antofagasta plc

ERO Copper

SPDR S&P Mtls & Mng

China Southern CSI SWS Non-Ferrous Metal ETF

Southern Copper

Freeport Mcmoran

London copper surged 9.3% in a single day, reaching a historic high, driven by speculation and expectations of easing, marking the largest increase in sixteen years