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After a hard correction, copper gains foothold as supply problems persist

After a two-session plunge, copper gained ground on Tuesday as concerns about supply and prospects for demand boosted the price.

The most active?copper contracts on the Shanghai Futures Exchange rose 2.60% to?close trading daytime at 104.500 yuan (15,066.54) per metric tonne.

As of 0715 GMT, the benchmark three-month Copper on the London Metals Exchange surged by 4.08%, to $13,417 per ton. Both exchanges saw copper prices fall sharply since Friday after a fervent rally. Shanghai copper fell as much 13.65% from its record high of 114,160yuan to 98.580yuan. The London benchmark lost up to 14.54% since its $14,527.50 peak. The price of silver and gold also rebounded on Tuesday, traders reported.

While mine disruptions, regional dislocations, and U.S. Tariff threats have kept supply concerns alive, the strong demand prospects for red metal due to its central role in AI data centres and electrification remain in place.

IGN analysts wrote in a note that "while volatility may continue in the short term, copper's narrative remains intact and the dip will ultimately attract renewed purchasing once macro-conditions settle." Copper prices are expected to fall, which will boost demand despite the Lunar New Year break in China's top consumer market that begins on February 15. This usually slows down market activity.

The Yangshan premium copper On Monday, the price of a ton of imported units in China jumped to $39 after having been at $20 on Thursday.

Tin is the worst performing base metal among other SHFE products. The most traded contract fell by 6.70%, closing at 383,340 Yuan per ton.

Aluminium fell by 0.96%. Zinc dropped by 0.79%. Lead shed 0.98%. Nickel lost 1.25%.

On the LME, other metals like aluminium, zinc, lead, nickel, and tin all saw gains.

(source: Reuters)