Weaker Dollar and Mixed Chinese Signals Support Copper Recovery After Sharp Correction

London | EcoPulse24

Copper prices improved, driven by a declining US dollar, restoring momentum to the market after a brief downturn. Futures rose above $5.9 per pound, ending a two-day slide as recent US tariff threats against European countries raised broader economic concerns, pressuring the US currency and supporting dollar-priced commodities.

In China, investors weighed a mix of economic signals. Annual GDP growth for 2025 reached 5%, meeting Beijing's target and providing macroeconomic support for industrial demand. Conversely, new home prices continued to fall in December, highlighting ongoing pressures in the real estate sector and limiting optimism for final metals demand.

This move follows last week's sharp pullback from record highs after the US delayed imposing tariffs on critical minerals. Copper was added to the US critical minerals list last year due to its importance in national security, defense technologies, and grid electrification, adding a strategic dimension to its pricing. In China, further regulatory measures also contributed to market balance, as authorities directed local exchanges to remove high-frequency trading company servers from data centers, part of broader efforts to reduce capital market risks.

Analysis
The overall trend reflects short-term support from a weaker dollar and eased US regulatory pressures, against structural constraints from China's property slowdown. Copper's consolidation will depend on broad-based industrial demand and the ability of monetary and regulatory policies to stabilize sentiment without reigniting sharp volatility.