Copper eases from record high; market waits for Fed policy

SHANGHAI: Copper eased from a record high on Tuesday as trading is still dominated by talks of this week’s Federal Reserve rate decision and the prospect of tight supply.

The most-traded copper contract on the Shanghai Futures Exchange declined 0.58% to 91,900 yuan ($12,998.77) per metric ton, as of 0255 GMT.

The benchmark three-month copper on the London Metal Exchange also eased, down 0.54% to $11,572.50 a ton. The Shanghai copper has gained 25% this year, and the London benchmark has surged more than 30% so far this year.

Analysts at Sucden Financial expect copper prices will likely be “characterised by sharp rallies followed by shallow consolidation”, as there is limited interest to sell at the current level. Investors expect a US rate cut later this week as well as hawkish comments on further reductions from Fed Chair Jerome Powell.

The market is now predicting fewer rate cuts in 2026, citing lingering inflation concerns and resilience in the US economy.

In the copper market, supply concerns persist due to mine disruptions and the continual dislocation of copper stocks into the US Copper stocks in the Comex warehouses continued to gain on Monday, rising to 439,510 short tons (398,717 metric tons) after hitting a record high on December 5.  

Elsewhere among SHFE base metals, aluminium lost 1.33%, zinc nudged 0.09% lower, lead declined 0.72%, nickel dipped 0.17%, and tin dropped 0.44%.

Among other LME metals, aluminium declined 0.54%, zinc dropped 0.42%, lead ticked 0.10% lower, nickel gained 0.24% and tin was unchanged.