Insights 
VT 
Key Points
- Copper retreats toward $5.87/lb after failing to hold record highs.
- Chinese demand signals soften as import premiums slide sharply.
Copper futures eased to around $5.87 per pound, giving back part of the previous session’s gains as signs of cooling demand emerged from China, the world’s largest consumer.
The pullback reflects a shift from supply-driven optimism toward a more balanced reassessment of near-term demand conditions.
A key signal came from the Yangshan copper import premium, which has halved over the past month to its lowest level since mid-2024.
The decline suggests reduced appetite for imported copper, often an early indicator that downstream demand is slowing.
High Prices Begin to Bite
Analysts have cautioned that record-high base metal prices are starting to weigh on consumption by squeezing corporate profit margins.
With copper having surged sharply in recent weeks, some end-users appear reluctant to chase prices at elevated levels, leading to softer spot demand.
Copper had rallied to fresh all-time highs last week on optimism linked to the global energy transition and supply concerns driven by the threat of US tariffs on critical minerals.
That rally tightened conditions in the London market and encouraged speculative inflows.
Policy Shifts Temper Bullish Sentiment
Since then, momentum has cooled. The US decision to defer tariffs on critical minerals has eased immediate supply fears, while China’s stepped-up crackdown on high-frequency trading has reduced speculative activity across commodity markets.
These developments have helped cap prices after an aggressive run-up.
Technical Analysis
Copper prices are attempting to stabilise after a volatile session that saw a swing from an intraday high of 5.8745 down to a low of 5.7713.
The asset has since recovered, now trading at 5.8195, just below a tight cluster of short-term moving averages around the 5.81–5.82 level.
This confluence suggests a critical pivot zone is forming, with price action consolidating around the 5, 10, 20, and 30-period MAs.
While the rebound off the session low has been encouraging, momentum remains tentative. Volume has picked up slightly but lacks the conviction seen during the earlier spike.
A sustained push above 5.8224 could invite another retest of the 5.85–5.87 region, while a drop below 5.79 risks extending the downside toward 5.76.
For now, the bias is cautiously bullish, but further confirmation is needed from volume and MACD crossover to support upside continuation.
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