Shanghai copper tumbles amid broad selloff ahead of China holiday

Shanghai copper declined on Friday amid a broader sell-off, as Chinese investors left on the last trading day before the long Lunar New Year break.

The most-active copper contract on the Shanghai Futures Exchange tumbled 1.97% to 100,660 yuan ($14,576.79) a metric ton as of 0245 GMT, but was set to end the week gaining 0.65%.

The benchmark three-month copper on the London Metal Exchange, however, rose 0.63% to $12,957 a ton, hovering below the $13,000 mark, and is poised to end the week 0.32% lower.

The London benchmark tumbled 2.21% on Thursday.

Physical demand is falling in China ahead of the nine-day break to start on February 15.

Spot copper premium, paid over the SHFE copper price, flipped back into a 60 yuan per ton discount on Thursday, indicating softening demand.

The Yangshan copper premium, a gauge of Chinese appetite for imported materials, fell to $34 a ton.

Though an improvement from $20 in late January, the premium remains historically low and does not indicate a material revival in Chinese demand.

Copper’s loss also came as a broader sell-off, led by tech shares, undefined was caught up in worries about artificial intelligence disruptions.

Elsewhere, tin and nickel were leading losses. The Shanghai most active tin tumbled 3.89%, and the London benchmark tin lost 2.74%.

The Shanghai nickel pulled back 3.68%, while the London nickel dropped 0.91%.

Nickel’s losses were due to profit-booking sales after Indonesia’s latest move to cut mining quotas for the world’s biggest nickel mine.

“However, demand is weakening as China moves rapidly toward nickel-free LFP batteries, preventing any meaningful tightening in the market. Without a rebound in nickel-rich chemistries adoption, upside remains limited,” said analysts at ING in a note.

Among other SHFE base metals, aluminium declined 1.31%, zinc dropped 0.79% and lead dipped 0.42%.

Elsewhere on the LME, aluminium nudged 0.11% lower, zinc ticked 0.06% down and lead dipped 0.10%.