Copper Rally Pushes Prices To Record Highs, But This Analyst Sees Red Flags

• Spot copper (XCU/USD) prices rallied to an all-time high of $6.52 per pound.
• Benchmark three-month copper on the London Metal Exchange broke above $14,000 a tonne for the first time.
• Southern Copper Corp. shares surged nearly 5% while Freeport-McMoRan Inc stock gained more than 2%.

Copper prices climbed to a fresh high on Thursday, extending a powerful rally as investors bet on rising industrial demand and the metal’s critical role in electrification and energy transition projects.

Spot copper (XCU/USD) prices rallied to an all-time high of $6.52 per pound. At the time of writing, it had pared some of the gains and was trading 3.1% higher at $6.12 per pound.

Benchmark three-month copper on the London Metal Exchange, after breaking above $14,000 a tonne for the first time earlier in the session, was up 4.7% at the time of writing.

What Are Analysts Saying?

Not all analysts are bullish. In a post on X, veteran commodities analyst Ole Hansen of Saxo Bank highlighted multiple near-term supply and demand signals that don’t fully justify the rally.

The gap between futures and spot prices is the widest it has been in nearly a year, exchange stockpiles are at multi-year highs, and Chinese import premiums have dropped to their lowest level in over a year, all pointing to softer physical demand than current prices suggest, the analyst said.

Despite supportive macroeconomic tailwinds such as rate cuts and strong interest in hard assets, the underlying fundamentals appear relatively weak, he noted.

According to multiple reports earlier this week, Deutsche Bank expects copper prices to peak around $13,000 per ton in the second quarter before easing in the second half of the year as output begins to recover at several major mines.

Stock Watch

Shares of miners, including Southern Copper Corp. (SCCO), surged nearly 5% while Freeport-McMoRan Inc (FCX) gained more than 2%.

Meanwhile, retail sentiment on Stocktwits for the Global X Copper Miners ETF (COPX) remained in the ‘extremely bullish’ zone over the past 24 hours, amid ‘extremely high’ message volumes.

One user expects the ETF to climb to $100 by the end of February.

Another user said copper appears poised for a parabolic move.

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