Copper prices bounced sharply as the brutal selloff across metals eased and a key Chinese industry bodyopenly called for an expansion of strategic and commercial stockpiles — a signal markets quickly interpreted as policy support.

Prices climbed as much as 4.9% to $13,526 a ton on the London Metal Exchange, recovering part of an 11% plunge from last week’s record highs. The rebound in copper came alongside strong recoveries in gold and silver, helping stabilize sentiment across the broader commodities complex.

China Steps In as Volatility Peaks

Momentum accelerated after the China Nonferrous Metals Industry Association urged authorities to expand China’s strategic copper reserves and coordinate with major state-owned producers to boost commercial inventories. The comments came during the association’s annual industry briefing, a closely watched forum for policy signaling.

China is the world’s largest copper consumer, and even verbal guidance from state-linked institutions can have an outsized market impact. Traders viewed the call for stockpiling as a clear attempt to put a floor under prices after last week’s extreme volatility.

Dip-Buying Returns Ahead of Lunar New Year

Buying interest was already building before the stockpiling remarks. Chinese investors, fabricators, and manufacturers returned to the market after weeks on the sidelines, replenishing inventories ahead of the Lunar New Year holiday.

According to market participants, a correction of more than 10% was enough to trigger physical demand. Fabricators stepped in to secure supply, while funds resumed dip-buying based on copper’s longer-term fundamentals, including electrification, grid investment, and energy transition demand.

This return of real-economy buyers marked a sharp contrast to last week’s investor-driven liquidation, which had been dominated by forced selling and risk reduction.

Structural Support, But Near-Term Headwinds Remain

Despite the rebound, analysts caution that near-term drivers for further upside have weakened. Uncertainty around U.S. monetary policy, easing concerns over immediate supply tightness, and a normalization of cross-market pricing have reduced speculative urgency.

Copper’s spot market continues to trade in contango on the LME, a structure that typically signals comfortable near-term supply. At the same time, large premiums previously seen on U.S. Comex contracts have faded, reducing incentives to ship metal into the United States ahead of potential import tariffs.

Still, copper’s broader narrative remains intact. Prices surged more than 40% in 2025, driven by structural demand expectations, constrained mine supply, and investor shifts away from fiat currencies and sovereign bonds.

What the Rebound Signals

The sharp recovery suggests copper is transitioning from panic-driven liquidation back toward a fundamentals-led market. China’s willingness to discuss stockpiling openly reinforces the idea that policymakers are alert to destabilizing price moves — and prepared to act if volatility threatens industrial supply chains.

Whether this rebound develops into a sustained rally will depend on physical demand holding firm after the holiday period and on clarity around global monetary policy. For now, copper has reclaimed its footing, even as markets remain hypersensitive to policy signals and macro shifts.