Copper prices edged higher on Wednesday, recovering some of the losses seen in the previous session, as investors turned their attention to tight inventories outside the United States while remaining cautious about the outlook for demand.
Benchmark three-month copper on the London Metal Exchange (LME) rose 0.4% to $12,796 per metric ton by 1700 GMT, following a 1.6% decline on Tuesday. The metal had reached a record high of $13,407 just a week earlier. According to market analysts, structural supply constraints continue to provide underlying support despite heightened volatility across the base metals complex.
Signs of short-term tightness were evident earlier in the week, when the premium of the LME cash copper contract over the three-month forward surged above $100 per ton, reflecting strong near-term demand. However, the spread reversed on Wednesday, moving into a $23.50 per ton discount, highlighting shifting market sentiment.
Market participants also remained wary of geopolitical risks. Dan Smith, Managing Director at Commodity Market Analytics, pointed to investor nervousness following renewed global tensions, including concerns over potential U.S. tariff threats toward European allies. Smith questioned the durability of copper’s rebound, suggesting that recent price strength could prove temporary as trading signals turned more cautious.
High prices have also begun to weigh on demand in China, the world’s largest copper consumer. The Yangshan copper premium, a key indicator of China’s import appetite, slipped to $22 per ton, its lowest level in nearly 18 months. While China’s broader economic indicators remain relatively strong, elevated copper prices have historically dampened buying interest. Chinese exports of refined copper totaled 96,000 tons in December, down sharply from November’s unusually high levels but still significantly higher than a year earlier.
Elsewhere on the LME, tin led gains among base metals, jumping 3.9% to $51,000 per ton amid tighter supply following Indonesia’s crackdown on illegal mining. Nickel also advanced, rising 2.3% to $17,995 per ton, reflecting broader movements across the metals market.
