Copper prices are climbing towards $13,000 per tonne. This rise is due to a weaker dollar and China reaching its GDP target. As a result, the industrial metals market is showing signs of strong demand, despite previous ups and downs. In the United States, copper stockpiles grew for the first time since September 2025. Warehouses tracked by the London Metal Exchange (LME) reported an increase of 950 tons. This change suggests a shift from the earlier trends where LME spot prices were higher than Comex front-month futures prices. It points to a stabilization of the market distortions caused by past tariffs.

The Impact Of Dollar Trends

The recent decline in the dollar is benefiting copper prices, making it more affordable for buyers worldwide. The Dollar Index (DXY) has dropped from its peak in late 2025 to below 104 this month, following concerns over new tariff threats. This trend is fueling broad interest in metals. Demand from China remains strong, supporting copper prices. With China meeting its 2025 GDP target, the latest Caixin Manufacturing PMI reading of 50.8 shows that industrial activity is still expanding into the new year. This boosts confidence in copper demand for the first quarter. We’re beginning to see signs that last year’s extreme market tightness may be easing. The rise in US copper inventories monitored by the LME since September 2025 is a significant sign that the inventory drain is reversing. Since January, global LME copper stocks have increased by over 5,000 tonnes.

Insights For Derivative Traders

For derivative traders, the important takeaway is the changing pricing between COMEX and LME exchanges. The significant premium on COMEX futures that drew metal into the US during 2025 has now vanished, with LME spot prices trading higher. This situation opens up opportunities for spread trades that capitalize on the ongoing normalization between the two markets. As these price movements are often influenced by political news, volatility is expected to remain high. A sudden shift in tariff policy could quickly change prices dramatically. For this reason, using call options to leverage potential price increases while managing risk, or utilizing straddles to trade volatility, could be smarter than simply holding long futures positions. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now