Copper reached nearly $11,800 per ton, a rise of 33% since the year’s beginning. China’s exports showed strength, increasing by almost 6% from the previous year, leading to its third-largest monthly trade surplus. Statements from the Politburo ignited hopes for economic support in China, the leading sales market for copper.<\/p>\n
While overall copper figures offered limited support, copper ore imports improved, rising nearly 13% from the previous year and almost 8% in the first eleven months compared to the preceding year. However, China’s refined copper production until October increased by 12.5% over the previous year, surpassing the growth in copper ore imports, which explains the material shortage at smelters.<\/p>\n
Imports of copper and products declined, falling below 430 thousand tons in November, the lowest since February. They were 4.5% lower in the first eleven months than the previous year. Despite increased production, China remains the largest importer of refined copper, accounting for 42% of global imports in 2024, according to the Australian Department of Industry, Science and Resources.<\/p>\n
With copper hitting a new record of nearly $11,800, we see that market sentiment is running very hot, largely driven by strong Chinese export numbers. This rally has been powerful, with prices up 33% since the start of the year. Traders holding long positions have seen significant gains from this momentum.<\/p>\n
However, we must be cautious about the conflicting signals beneath the surface. China’s imports of refined copper and copper products fell in November to their lowest level since February of this year. This is a critical warning, as it suggests that physical demand inside the world’s largest consumer is not nearly as strong as the price suggests.<\/p>\n
This view is supported by recent data from the London Metal Exchange, where we’ve seen warehouse stockpiles rise for three consecutive weeks to over 115,000 tonnes. Furthermore, last week\u2019s Caixin survey for China’s construction sector slipped to 49.2, indicating a contraction in a key copper-consuming industry. These are not signs of a market with runaway physical demand.<\/p>\n
We saw a similar pattern emerge back in the bull run of 2021. Sentiment and stimulus hopes drove prices to what were then record highs, even as underlying physical indicators began to weaken. That rally was followed by a substantial price correction over the following year.<\/p>\n
Given the record-high prices and these clear warning signs, it would be prudent for traders to use options to protect existing long positions. Buying some downside protection, perhaps through put options with January or February 2026 expiries, could lock in recent profits. This allows for continued participation in any further upside while managing the growing risk of a sharp pullback.<\/p>\n
Alternatively, for those who believe this rally is nearing its peak, derivative strategies that profit if the price stalls could be effective. Selling call options with strike prices at or above $12,000 could generate income based on the view that a new psychological barrier is forming. The main takeaway is that the divergence between the hot paper market and the cooling physical market is now too wide to ignore.<\/p>\n","protected":false},"excerpt":{"rendered":"
Copper prices surged 33% in 2024 as China boosts output, imports decline, and supply tightens.<\/p>\n","protected":false},"author":62,"featured_media":0,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-36410","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/36410","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=36410"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/36410\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=36410"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=36410"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=36410"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}