Copper prices climbed sharply as mainland Chinese traders returned from the Lunar New Year break, injecting fresh liquidity into the market and reversing earlier weakness. Futures rose nearly 2% toward $5.9 per pound, supported by optimism surrounding potentially lower U.S. tariffs after the Supreme Court invalidated key reciprocal duties. Yet while sentiment improved, rising inventories and elevated spot prices are raising new questions about the durability of the rebound.

Tariff Relief Narrative Fuels Short-Term Momentum

Copper settled at $5.88 per pound on February 24, 2026, up 1.66% on the day. The move reflects a partial unwind of recent risk-off positioning after U.S. trade policy faced legal setbacks. Although President Donald Trump threatened to lift baseline global tariffs from 10% to 15%, market participants anticipate that China could still face relatively lower average levies on metal-intensive exports compared with earlier proposals.

For industrial metals, even incremental clarity on trade flows can significantly alter pricing dynamics. Copper, often viewed as a barometer of global growth and manufacturing activity, responds quickly to shifts in export expectations and supply chain stability. The tariff recalibration narrative has therefore provided a tactical boost, particularly as Chinese traders resumed activity following the holiday closure.

Inventory Build and Demand Sensitivity

Despite the rally, underlying physical indicators present a more cautious backdrop. Exchange-tracked copper inventories have climbed to their highest levels since 2024, suggesting that higher prices may be dampening short-term buying from China, the world’s largest copper consumer.

Stockpiles in both London and New York have also increased, signaling that supply is not immediately constrained. Elevated inventories can act as a cap on upside momentum, particularly if Chinese smelters and fabricators begin to slow purchases in response to price sensitivity.

Over the past month, copper has declined 2.39%, even though it remains 26.14% higher than a year ago. The metal reached an all-time high of $6.58 in January 2026, underscoring how stretched positioning had become. From a behavioral perspective, markets that revisit record highs often attract speculative flows, but they also become vulnerable to profit-taking once macro uncertainty resurfaces.

Macro Crosscurrents and Forward Outlook

Copper’s trajectory now hinges on three intersecting forces: U.S.-China trade developments, global manufacturing demand, and inventory normalization. If tariff tensions ease further, exporters may accelerate shipments, reinforcing industrial demand expectations. Conversely, a renewed escalation in global trade friction could weigh on forward demand estimates.

At the same time, investor positioning remains sensitive to broader risk sentiment. As AI-driven capital expenditure and electrification trends continue to support long-term copper consumption narratives, short-term pricing may remain volatile amid shifting macro headlines.

Looking ahead, traders will monitor Chinese import data, warehouse inventory trends, and U.S. trade policy signals for confirmation of sustained demand. While structural themes tied to energy transition and grid expansion remain supportive, near-term consolidation appears likely unless inventories tighten meaningfully. Copper’s rebound signals resilience — but the sustainability of the move will depend on whether physical demand absorbs the recent price strength.