Copper prices experienced a downturn on Tuesday, influenced by trader apprehension leading up to the Federal Reserve’s Open Market Committee meeting. According to ANZ, any indications of a decelerated easing cycle in 2026 could exert additional pressure on industrial metals. Markets are closely watching for signals that may come out of the meeting.
ANZ noted that markets were also interpreting signals from China’s recent Politburo meeting, which defined the economic strategy for the coming year. Despite indications from state media suggesting Beijing intends to maintain a proactive fiscal approach and a “moderately loose” monetary policy, investor scepticism persists. Existing stimulus initiatives have so far failed to generate a substantial recovery in industrial activity.
In response to the policy readout, Chinese equities declined on Tuesday. Concurrently, indicators of weakening demand are emerging. Fabricators are struggling to pass on record-high copper costs to consumers, and processing fees for copper rods, essential for electrical wiring, have plummeted to a record low of 300 yuan ($64) per tonne this month, as reported by Mysteel Global. These factors collectively contribute to the downward pressure on copper prices.
