Copper Prices Likely To Remain Uncertain Ahead Of Chinese Holidays

Copper prices stayed in a narrow range on Tuesday as traders grew cautious before China’s long New Year holiday break. On the Multi-Commodity Exchange (MCX), February copper derivatives slipped 0.9% to an intraday low of ₹1,238.55 per kg. On the London Metal Exchange (LME), benchmark three-month copper derivatives fell 0.18% to USD 13,152.50 per tonne.

Despite the US dollar falling for the third consecutive trading session, copper could not gain much ground. Declining demand for copper in the international market kept buyers on the sidelines, and inventories in key warehouses rose.

What Is Happening To Demand And Inventories?

Copper inventory at exchange-registered warehouses has risen suddenly amid declining international demand. This suggests that industrial buyers are holding back, rather than lifting the red metal for use. Weak demand automatically leads to price uncertainty. Even though the US dollar has weakened, which often supports commodities, copper has stayed under pressure.

Another reason for declining copper demand is the upcoming Chinese Lunar New Year Holiday, which begins on 15 February and lasts nine days. Many factories and markets shut down during this period. This slowdown in activity usually reduces demand for industrial metals like copper.

What Do Analysts See Next For Copper?

Analysts believe that despite the current unpredictability, the long-term outlook for copper remains positive. Demand from sectors like renewable energy, electric vehicles and data-centre expansion is expected to stay strong. These are the structural drivers that might push copper consumption as well as its prices up in the upcoming months.

Ajit Mishra, senior vice president at an international broking firm, said, “Expecting the copper demand to remain robust in the wake of the AI boom and requirements from the green energy sectors. He does not rule out intermittent corrections ahead of the key economic releases.”

He added, “Copper touched record levels of around USD 14,000 per tonne on the LME towards the end of 2025 before mildly pulling back in early 2026. The red metal has rebounded sharply off the lows during the previous week and appears to be consolidating above the 1,200 (MCX) level.”

Key Takeaways For Investors

For copper investors, the long-term outlook may remain supportive. However, in the short-term, prices may trade sideways or remain unpredictable. As a cautious approach, investors can wait for the nine-day Chinese break before taking fresh positions. Once trading picks up again after the break, there could be clearer signals in direction.

Sources:

The Economic Times

Bloomberg