Copper prices experienced a significant relief rally on Tuesday, bouncing back sharply after enduring steep declines over the previous trading sessions. The red metal found stability as concerns over supply dynamics and an improving demand outlook converged to support prices across major global exchanges.
Price Movements Across Key Exchanges
On the Multi Commodity Exchange (MCX), copper prices surged as much as 5.91% to reach ₹1,291 per kilogram during Tuesday's trading session. This upward movement represented a notable recovery from the recent downward pressure that had characterized the market.
Simultaneously, on the London Metal Exchange (LME), the benchmark three-month copper contract demonstrated strong performance with a 4.08% jump to $13,417 per tonne. This rebound followed substantial corrections that had occurred since Friday, effectively reversing some of the losses from the earlier blistering rally that had swept across both exchanges.
The Shanghai Futures Exchange also participated in this recovery trend, with the most-traded copper contract rising 2.60% to close the daytime session at $15,066.54 per metric tonne. This coordinated upward movement across major exchanges signaled a broader market shift toward stabilization.
Drivers Behind the Copper Rally
Analysts point to several key factors contributing to Tuesday's copper price recovery. According to market observers quoted by Reuters, the rebound in copper prices coincided with a recovery in gold and silver prices within the broader metals market, suggesting interconnected momentum across precious and industrial metals.
The primary driver of the copper rally appears to be renewed buying interest from China, the world's largest consumer of the industrial metal. Fabricators and manufacturers who had remained on the sidelines for weeks re-entered the market to rebuild inventories ahead of the Lunar New Year celebrations scheduled for later this month. This strategic bargain hunting provided substantial support to copper prices.
A Bloomberg report highlighted that investors have been increasingly flocking to metals amid ongoing uncertainty surrounding the US dollar and a broader shift away from traditional currencies and sovereign bonds. This trend has triggered sharp rallies across various commodities throughout January, with copper's latest gains building upon an impressive surge of over 40% recorded in 2025.
Market Structure and Analyst Perspectives
Market structure indicators reveal interesting dynamics in the copper market. According to Bloomberg data, spot copper has been trading at a discount to the three-month LME contract, reflecting a contango structure that suggests sufficient near-term supply availability. Simultaneously, the previously wide premium of Comex prices over LME contracts has diminished, reducing incentives to ship metal to the United States ahead of potential import tariffs that had earlier tightened supplies in other regions.
Ponmudi R, CEO of Enrich Money, provided detailed analysis of the market situation: "From a fundamental standpoint, the rejection aligns with a shift in macro and positioning dynamics. Strength in the US Dollar and a reassessment of global growth and interest-rate expectations triggered profit booking in base metals after an extended rally. At the same time, earlier concerns around soft Chinese industrial demand weighed on sentiment at higher prices."
He further explained: "However, recent developments show that Chinese copper plants and fabricators have returned to the market to buy on dips after staying sidelined during the rally, highlighting that physical demand remains intact but is highly price-sensitive. This has helped stabilize prices near lower demand zones but has not been strong enough to offset speculative selling pressure."
Future Outlook for Copper Prices
Looking ahead, market experts offer varying perspectives on copper's potential trajectory. According to Ponmudi, copper's direction will largely depend on whether prices can reclaim and sustain levels above the 1,330–1,350 resistance band with supportive macroeconomic cues.
"Until that happens, the market structure favors a sell-on-rise bias, with downside risks extending toward 1,240, followed by 1,200 and the 1,180–1,170 demand zone," he noted. "While underlying physical demand provides a cushion on deeper declines, the combination of technical exhaustion and macro headwinds suggests that upside attempts may continue to face resistance, keeping Copper in a consolidation-to-correction phase rather than a renewed trending move."
Anindya Banerjee, Head of Commodity and Currency Research at Kotak Securities, offered additional insights: "Copper prices recovered sharply from an intraday low of 1156 yesterday to around 1297 at the time of writing. This move reflects a positional-sizing rebound after a steep crash from 1480 to 1156 over just a few sessions, driven by aggressive deleveraging and margin-call–led liquidation."
Banerjee added important seasonal considerations: "Looking ahead, February typically sees reduced participation as China enters its holiday period, which could push metals markets into a consolidation phase. Hence, we expect copper to trade in a broad range of 1150–1350 over the next few weeks."
Disclaimer: This analysis is for educational purposes only. The views and recommendations presented above represent those of individual analysts or broking companies, not Mint. Investors are strongly advised to consult with certified experts before making any investment decisions.
