Copper and other base metals have slipped from recent highs after a strong run-up. The London Metal Exchange index was near 5,400, about 4% below its record high at the end of January. Trading may slow ahead of the Chinese New Year. Stock exchanges will close starting next Monday. A Mysteel survey found some copper firms in southern China stopped production at the end of January and do not plan to restart until March. China’s share of global metal demand growth has fallen compared with pre-pandemic years. Bloomberg Intelligence estimates China made up about 60% of the increase in metal demand from 2020 to 2025, versus 137% from 2008 to 2020. Copper on the Shanghai Futures Exchange hit a record above RMB 100,000 per ton in late January, equal to more than USD 15,000 per ton. That move also helped lift prices on the London Metal Exchange. The rally happened alongside a sharp jump in open contracts for copper futures and options in Shanghai, which reached a multi-year high. Over the past 10 days, open interest has dropped back to around last year’s average. Since the end of January, Shanghai copper has fallen 4.5%, which has also pressured London copper. The article notes it was produced with an AI tool and reviewed by an editor. As of today, February 10, 2026, copper prices are pulling back from recent highs. Traders should watch this pattern closely. LME copper is trading near $9,800 per tonne after peaking above $10,200 in late January, adding uncertainty to the market. This pullback is happening just before the Chinese New Year holiday, a period that usually slows trading. A similar setup appeared in early 2025. A speculative rally on the Shanghai exchange pushed copper to record levels, followed by a fast drop. The surge was driven by a quick rise in open futures contracts that later disappeared. That decline is a warning not to chase rallies that are not backed by real demand. This year, open interest in Shanghai has risen, but it has not reached the extreme levels seen in early 2025. That suggests traders are being more cautious. Treat sharp price spikes with care and track open interest daily. A sudden fall in open contracts can signal a near-term price drop, as it did last year. The broader backdrop also argues for caution. China is no longer driving global metal demand growth as strongly as it once did. The January 2026 NBS Manufacturing PMI was 49.8, showing a mild contraction. This supports the view that China is not providing the same strong boost it did after 2008. Buyers should not assume Chinese demand will support prices indefinitely. Given the risk of a correction like last year’s, derivatives traders may want to hedge downside risk with put options. Bear put spreads can also work. They can benefit from a drop while limiting upfront cost. These trades can help if today’s softness turns into a larger decline in the weeks ahead. Global inventories are also rising. LME-registered copper stocks have increased to 115,000 tonnes, suggesting supply is running ahead of near-term demand. In that setting, selling call options against long positions may be a way to earn income if prices move sideways or fall. This approach fits traders who think upside from here may be limited.

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