Chinese copper buyers plan to extend their Lunar New Year holiday amid near-record prices that are dampening industrial demand for the metal.
Prolonged Shutdowns Hit Producers
The price rally has raised financial costs for copper rod and pipe producers while shrinking their order books, according to Wang Wei, general manager of Shanghai Wooray Metals Group Co., a supplier of refined metal to fabricators.
The Lunar New Year holiday starts next Monday and officially concludes on February 23, but demand slowdowns are already emerging this week, Wang noted.
China, the world’s largest buyer of physical copper, has resisted the recent price surge amid a cooling economy. These extended factory shutdowns during the holiday are expected to further slow market momentum after investors pushed prices to new peaks late last month.
A survey of plants representing 3.3 million tons—or about one-fifth—of China’s copper rod capacity reveals that some producers in the industrialized south halted operations as early as January 25 and will not resume until March. Copper rod makers supply roughly half of the nation’s copper products, including wire for power transmission.
Manufacturers of pipes, strips, and plates—essential for plumbing, circuit boards, and solar panels—may also postpone restarts due to sparse orders.
Speculation Outpaces Real Demand
This production slowdown reinforces the perspective that speculative trading in copper, fueled by supply constraints and its role in energy transition and computing, has surpassed actual consumption levels.
Fabricators and manufacturers increased buying last week when prices dipped below 100,000 yuan ($14,400) per ton, marking a key psychological threshold, stated Zhou Xiao’ou, an analyst at Zijin Tianfeng Futures Co.
Should prices remain under this level when buyers return post-holiday, demand could surge notably, Zhou added. Low inventories at fabricators would further enable additional purchases, according to Fan Rui, an analyst with Guoyuan Futures Co.
Potential demand boosts include advance buying from solar and battery producers ahead of export tax rebate cuts starting April 1.
Current Market Prices
Shanghai copper futures climbed 1.8% to 101,940 yuan per ton at mid-morning. In London, futures rose 0.7% to $13,085.50 per ton.
