Daily Market Brief 2026.2.4

According to the latest market information, the current copper price fluctuations are mainly influenced by the following major macro factors:

1. Changes in expectations of U.S. monetary policy

Trump’s nomination of Walsh as Fed chair: Triggers hawkish expectations in the market, U.S. PPI inflation data unexpectedly rises, the dollar quickly recovers and has a negative impact on copper prices.

2 Movement of the dollar index

A weaker dollar has provided bullish support for copper prices, but the dollar index has shown signs of a rebound recently. Trump’s threat to raise South Korea’s tariff rate from 15% to 25%, along with an 80% probability of a U.S. government shutdown, have pushed up U.S. policy uncertainty and weakened the dollar.

3 Geopolitical risks

The uncertainty brought about by the US geopolitical actions in Iran and Venezuela, as well as the Chilean strike that has blocked access to the two copper mines, have a direct impact on copper production. These geopolitical factors have deepened the market’s valuation of copper supply risks.

4. Trade policy implications

U.S. tariff concerns continue to have a negative impact on copper prices. The impact of the US policy to impose a 10% tariff on Chinese imports in 2025 persists, and market concerns over the risk of a trade war have risen from time to time.

5. The global economic environment

The global financial environment is moving in a significantly more accommodative direction. Against this backdrop, major global stock markets have generally risen, and commodity markets have also seen a general rally. But with the manufacturing PMI rebounding to around the 50% boom-bust line, the ECB is not expected to rule out raising interest rates in 2026.

6. Precious metals market linkage

The financial attributes of copper have been heating up again recently, and precious metals are causing significant interference to copper prices. Dragged down by the rapid weakening of gold and silver prices, copper prices are falling at an accelerated pace.

Copper is currently at a stage where macro factors and fundamentals are both bullish and bearish, and market sentiment is volatile. It is recommended to keep a close eye on the policy direction of the Federal Reserve, the movement of the US dollar index, and changes in geopolitical risks.

Based on the latest market information, I make the following analysis and forecast of the copper price for the next three months:

The current market situation of copper prices

According to SMM data, the average price of 1# electrolytic copper on February 3, 2026 was 101,320 yuan per ton, a pullback from the January high of 104,410 yuan per ton. Historically, copper prices showed a clear upward trend between November 2025 and January 2026, rising from 86,840 yuan per ton to 104,410 yuan per ton.

Forecast for the next three months:

one First Quarter (February – March) : Volatile adjustment period

Expected price range: 98,000-103,000 yuan/ton

The current copper price is in a high correction phase, mainly affected by the following factors:

1) Macro policy uncertainty: Trump’s nomination of Walsh as Fed chair has raised hawkish expectations, and a rebound in the dollar index has put pressure on copper prices

A. Pressure on the demand side: Copper cable operating rate dropped to 68.89% in December, high copper prices curb the release of downstream demand

B. Divergence in inventory structure: U.S. inventories continue to rise, while inventories in non-U.S. regions are relatively tight

two Early second quarter (April) : Stabilization and recovery period

Expected price range: 102,000-108,000 yuan/ton

As the following positive factors gradually emerge:

1) Supply-side support: Chile’s National Copper Commission raises copper price forecast for 2026 to $4.95 per pound (about $10,900 per ton)

2) Geopolitical risks: A strike in Chile has blocked access to two copper mines, having a direct impact on copper production

3) Energy transition demand: Copper’s key role in AI data centers and the clean energy transition continues to stand out

Analysis of key influencing factors:

one Bullish factors

1. Structural supply tightness: Goldman Sachs raises its copper price forecast for the first half of 2026 to $12,750 per tonne, citing a shortage premium due to limited inventories outside the United States

2. Expectation of a weaker dollar: Despite a short-term rebound, the long-term trend of a weaker dollar still supports copper prices

3. A double dip in inventories: LME copper write-off receipts rebounded to 37%, further contraction could occur if all inventories were withdrawn

two Bearish factors

1. High prices suppress demand: The sustained surge in copper prices has significantly dragged down downstream demand, and companies are becoming more cautious in their purchases

2. Tightening of macro policies: Fed hawkish expectations and trade policy uncertainties

3. Speculative funds take profits: Some investors choose to lock in after copper prices are high

Risk Warning:

Copper prices will face the following risks over the next three months:

- The exact timing and intensity of U.S. tariff policy

- The pace of monetary policy shifts in major global economies

- The actual impact of geopolitical conflicts on supply chains

Overall judgment: Copper prices will show a trend of first falling and then rising in the next three months, with limited short-term pullback space, and still have an upward basis supported by the fundamentals of supply and demand in the medium and long term. Investors are advised to keep a close eye on changes in inventories, macro policy trends and the recovery of downstream demand.