Copper retreats from record close as purchases in China slow

Copper retreated from a record close as the rally started to deter purchases in China, where investors were monitoring the summit between Chinese leader Xi Jinping and US President Donald Trump.

Futures fell 1.5% on the London Metal Exchange on Thursday, snapping an eight-day rally that had been spurred by mounting supply risks from mine disruptions around the world and bets on demand from the artificial intelligence boom, following a surge in tech stocks. 

Soaring prices for the wiring metal that’s key to a global move towards electrification are “notably constraining” Chinese demand, said Xu Wanqiu, an analyst with Cofco Futures Co. Further advances may not be sustainable, though domestic copper prices may still hover around 105,000 yuan ($15,470) a ton as the trading logic of betting on AI demand remains intact, Xu added.

Overall, Chinese demand has been resilient this year as consumption in the energy transition sector offsets losses from the traditional property sector. That’s boosted prices 8.6% on the Shanghai Futures Exchange in 2026, helped by renewed purchases in March after the Lunar New Year holidays. 

Still, Chinese fabricators saw orders for copper rod, used in electric wires, weaken this month from April and a year ago, as buyers hold off purchases with prices on the SHFE above 106,000 yuan a ton, said Yan Yuhao, a senior analyst with producer Zhejiang Hailiang Co., citing an internal estimate. 

Copper tube orders, used in air conditioners, refrigerators and plumbing will also drop about 20% in May on a monthly basis, primarily due to rising prices, Yan said, adding the effective closure of the Strait of Hormuz is dampening demand for the product. 

On-warrant copper inventories on SHFE started to increase this week, rising by 10% in the past three days to 97,001 tons, according to data from the bourse. That followed a significant drawdown in readily available inventories in the past two months.

Meanwhile, Xi and Trump kicked off a summit on Thursday, which is a first visit by a sitting US president to Beijing in nearly a decade. Trade, Iran and Taiwan were among key topics up for discussion during the two-day visit.

Traders are also monitoring the Chinese tax authority’s crackdown on the ‘invoicing economy’ or fraudulent trades that inflate revenue, a move that has crimped liquidity in spot metals trading and slowed imports into the country.

Copper settled at $13,938.50 on the LME. Other LME metals were mixed, with tin and nickel falling while zinc, lead and aluminum advanced.