London copper soared 9.3% in a single day to a record high, with speculation and easing expectations triggering the biggest increase in sixteen years.

London Metal Exchange (LME) copper futures prices soared to a record high on Thursday, posting the largest single-day gain in over sixteen years. The main contract closed up 9.3% at $14,301.50 per ton, briefly breaking through the $14,400 mark and setting a new all-time high. This sharp rally occurred mainly during Asian trading hours; within less than an hour from 2:30 a.m. London time, copper prices surged more than 5%. According to the head of non-ferrous metals research at C&D Corporation, “This round of increase is completely driven by speculative capital; considering the timing, it’s very likely all speculative activity.” As a key industrial metal, copper prices have risen about 25% since early December. Other base metals also broadly strengthened that day, with LME aluminum prices up 1.8% and zinc up 5%. Market analysts point out that the recent new-year rally in commodities has been driven by multiple factors, including a weakening U.S. dollar, rising demand for safe-haven physical assets, and geopolitical tensions. Additionally, expectations that the Federal Reserve will shift to a more accommodative monetary policy have provided liquidity support for the price rise. Speculative frenzy drives trading volume surge Speculative trading activity in the futures market has markedly intensified. Trading volume at the Shanghai Futures Exchange has soared; as of last week, January 2026 became the most actively traded month for its six major base metal contracts on record. On Thursday, the copper contract posted the second highest single-day volume in history. Market heat continues to spread. Shanghai copper futures climbed further to 112,000 yuan per ton after the night session opened, having already surged 5.8% in Thursday daytime trading to close at 109,110 yuan. Prices for a range of metals—from tin to silver—have recently hit record highs, showing that speculative capital is pouring broadly into the commodity market and generating a rotation effect. Eric Liu, Deputy General Manager of ASK Resources Co., analyzed: "The market is showing obvious sector rotation characteristics. Copper prices have been consolidating around $13,000 per ton for a long time, and capital has been positioning itself for quite a while. The current rise is the result of accumulated expectations being unleashed." Demand-supply signals diverge from price trend A market paradox worth noting is that this surge happened while some fundamental indicators sent opposite signals. The premium for LME copper futures has widened, a structure that usually suggests relatively ample spot market supply—contrasting with the rapid price increase. The core logic behind copper’s long-term appeal to investors is that the energy transition and global data center expansion are widely seen as structurally boosting long-term demand. Analysts point out that as long as expectations for a Federal Reserve rate-cutting cycle remain unchanged, the macro logic supporting copper’s upward trend persists. Regarding how high prices might climb, he said: "As long as the U.S. continues to invest in AI, semiconductors, and power grid infrastructure, it’s hard to make a clear prediction about the top for copper prices." Federal Reserve policy expectations provide support Federal Reserve Chair Jerome Powell said after the policy meeting on Wednesday that the U.S. economic outlook has “improved significantly,” while the Fed decided to keep rates unchanged. Powell’s term ends in June, and the market expects President Trump may appoint a successor with a more dovish stance, potentially increasing the Fed’s ability to cut rates further going forward. This potential policy shift offers additional room for monetary easing, further fueling the recent commodity price surge. However, there are also warning signals in the market. Trina Chen, co-head of equities at Goldman Sachs, pointed out on Wednesday that the stunning rise in metal prices may have already outstripped actual demand support. She warned that as high prices deter physical buyers, the market may face a “technical correction.” This reveals that beyond macro narratives and speculative fervor, whether real demand can match current prices has become a key risk variable. Risk warning and disclaimer The market involves risk, and investments require caution. This article does not constitute personal investment advice and has not accounted for the specific investment objectives, financial situations, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Invest at your own risk accordingly.