What’s going on here? Copper prices have started falling from their record highs, as Chinese buyers saw their resilience challenged. What does this mean? Copper hit a record high of $11,100 a ton last month, fueled by optimistic investors betting that the generally high-in-demand metal would stay scarce and, in turn, expensive. But while copper’s price is still relatively lofty, it has dropped nearly 13% from that peak. That’s because Chinese buyers are contending with stalling property and industrial sectors, so they don’t need to stock up on so much of the shiny stuff. As a result, warehouses in the country are full of unsold copper, marking the biggest surplus in four years. And as the golden rule goes, the more there is of something, the cheaper it tends to be. Why should I care? Zooming out: Welcome to the new world. China usually accounts for more than half of global copper demand. So if the country’s buyers resume their old habits, some traders believe we’ll see a new record price later in the year. But if not, that might signal serious demand issues, which could send the metal’s price down even further. Look further ahead, though, and there will be more influences at play. The global shift toward clean energy should push up demand, as extra copper will be used to bolster the infrastructure around transport electrification, 5G, and AI. The bigger picture: The surplus won’t last. Unless billions are thrown into production, there might not be enough copper to go around in the years ahead. One hedge fund is even predicting that prices could hit $40,000 in that case. That would be the cue for stocked-up Chinese suppliers to sell their lot. And the mere prospect explains why mining company BHP wants to snap up rival Anglo American, eager to cover more copper-covered ground. | 