Copper Rebounds as Chinese Demand Strengthens, Inventory Concerns Loom
Copper prices experienced a boost Tuesday, February 24, 2026, as Chinese markets reopened after the Lunar New Year holiday. Benchmark three-month copper on the London Metal Exchange (LME) rose 1.8% to $13,100, a one-week high, following a 0.7% decline on Monday. This increase is attributed to firmer demand within China, coupled with positive sentiment surrounding a recent US tariff ruling perceived as beneficial to the Chinese economy.
The Yangshan copper premium, a key indicator of Chinese demand, saw a significant jump of 60% to $53 a ton, further confirming the uptick in physical demand.
Inventory Build-Up Raises Questions
Despite the positive demand signals, copper inventories in LME-approved warehouses have been steadily climbing. Overnight, they increased by 1,350 tons, reaching 243,175 tons – the highest level since March 2025. This represents a roughly 71% year-to-date increase. This accumulation suggests subdued physical offtake and a lack of immediate buying urgency.
Analysts suggest that a withdrawal of these inventories will likely be needed to provide further support to prices.
Broader Base Metals Performance
Beyond copper, other base metals also saw gains. Zinc increased by 0.9% to $3,383, aluminum rose 0.4% to $3,101, tin advanced 2.5% to $48,890, and lead added 0.1% to $1,953. Nickel experienced a more substantial climb of 2.9% to $17,780 following news that the Indonesian government is considering revoking the environmental permit of a company after a landslide at a nickel processing hub.
Gold Prices Dip Amid Dollar Strength and Trade Uncertainty
In the precious metals market, gold prices edged lower as a strengthening US dollar and profit-taking following a previous rally exerted downward pressure. The market remains cautious regarding US trade policy following a Supreme Court ruling on tariffs and the subsequent imposition of a blanket 15% levy on imports.
Ongoing trade negotiations with the EU and India are also paused, adding to the uncertainty. President Trump’s warning of higher duties for countries withdrawing from trade deals further complicates the landscape.
Macroeconomic Factors and Central Bank Activity
Recent economic data indicates a moderating growth rate, with Q4 GDP slowing to 1.4% from 4.4% in Q3. Even as inflation remains sticky, the Federal Reserve is expected to maintain a patient stance. Structural support for gold continues, driven by central banks diversifying their reserves and increasing bullion holdings.
Silver futures decreased by 0.4% to $86.25, and platinum fell 1% to $2,133.
Geopolitical Risks Remain a Factor
Geopolitical tensions, particularly the upcoming third round of nuclear talks between the US and Iran in Geneva, continue to influence market sentiment.
Did you know?
The London Metal Exchange (LME) is the world center for industrial metals trading.
Frequently Asked Questions
- What is driving the recent increase in copper prices?
- Why are LME copper inventories increasing?
- What is the outlook for gold prices?
Firmer demand in China, particularly following the Lunar New Year holiday, and a perceived benefit from a recent US tariff ruling are contributing to the price increase.
The increase suggests subdued physical demand and a lack of immediate buying urgency from consumers.
Structural support for gold remains intact due to central bank demand, but prices are currently influenced by dollar strength and trade policy uncertainty.
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