Copper and aluminum futures in Shanghai and London hit multi-month highs as investors pile into Chinese metal markets, betting on a synchronized rebound in global demand. The rally reflects growing confidence in China's post-pandemic economic momentum and broader industrial recovery.
- SHFE copper rose 7.3% to 85,200 yuan/ton, its highest since mid-2024
- Aluminum futures on SHFE and LME up 6.8% and 5.1% respectively
- RMB gained 1.2% against the dollar in one week
- LME copper index surpassed $9,200/ton, its highest since October 2023
- Steel producers saw average stock gains of over 8% amid rally
- Speculative positioning in metals now at elevated levels, prompting regulatory vigilance
China’s metal markets are experiencing a sharp rally, with copper (CU) and aluminum (AL) futures on the Shanghai Futures Exchange (SHFE) and London Metal Exchange (LME) reaching their highest levels since mid-2024. The SHFE copper contract for February delivery surged 7.3% in a single session, closing at 85,200 yuan per metric ton, while aluminum rose 6.8% to 18,940 yuan, driven by speculative inflows and optimism over global demand revival. This surge coincides with a strengthening RMB, which appreciated 1.2% against the dollar over the past week, signaling improved capital confidence in China's financial markets. Analysts point to renewed infrastructure spending and property sector stabilizations as underlying catalysts, though the dominant driver appears to be macroeconomic speculation. Traders are positioning for a global manufacturing rebound, with the LME copper index now trading above $9,200 per ton—the highest since October 2023. The rally has also lifted related equities, with China's top steel producers posting gains of over 8% on average, reflecting heightened expectations for industrial activity. Domestic metal producers like China Molybdenum and Yunnan Copper have seen their stock prices rise in tandem, while export-focused smelters are adjusting pricing models to reflect higher input costs. Market participants remain cautious, however, as the pace of the rally raises concerns about overheating and potential regulatory intervention. The People's Bank of China has not yet signaled policy tightening, but monitoring of speculative positions is expected to intensify in the coming weeks. The momentum could stall if data from the U.S. and Europe fails to support the anticipated recovery.