China’s metal markets soar amid optimistic forecasts

Record Investments Pour into China’s Metals Markets

Investors are placing unprecedented wagers on China’s metals exchanges, anticipating that prices for base metals and lithium will continue to climb.

By late 2025 and into early 2026, speculative open interest in copper, zinc, nickel, tin, lead, and aluminum on the Shanghai Futures Exchange reached all-time highs. Similarly, lithium contracts on the Guangzhou Futures Exchange saw near-record levels of open interest.

This surge in activity is fueled by worries over tightening global metal supplies, the appeal of commodities amid lower interest rates, and expectations that industrial and electrification demand will remain strong, even as U.S. trade policies evolve.

According to Bloomberg, the Shanghai Futures Exchange reported that trading values for these six base metals soared by more than 260% year-over-year, driven by the record open interest.

In December alone, combined trading turnover for base metals, gold, and silver reached a staggering 37.1 trillion yuan (approximately $5.3 trillion).

On December 29, copper trading volumes in Shanghai hit their highest point in over ten years, based on Bloomberg’s analysis.

Meanwhile, copper prices on the London Metal Exchange repeatedly broke new records.

On the Guangzhou Futures Exchange, both open interest and trading volume for lithium reached historic peaks in November 2025. Although there was a decline in December after the exchange increased fees and limited new positions, activity remained elevated as traders continued to focus on this crucial battery metal.

With a positive global outlook for metals, analysts predict that trading volumes and open interest on Chinese exchanges will stay high throughout the year.

“Most base metals are expected to remain well supported in the coming year,” wrote ING commodities strategists Warren Patterson and Ewa Manthey in a recent note, as copper prices approached record levels in December.

ING analysts also point out that ongoing uncertainty around U.S. tariffs, supply disruptions, and a weaker dollar are likely to further strengthen metals markets in the months ahead.

They added, “Concerns over U.S. tariffs on refined copper will probably keep strong copper flows heading to the U.S., tightening supply elsewhere.”

Additionally, ING expects the global aluminum market to remain tight, as China nears its production limits and other producers consider shutting down due to high energy costs.

Metals Rally Intensifies into 2026

As 2026 got underway, nickel prices spiked by 10% in a single day on the London market, fueled by a surge in Chinese buying. Despite an oversupplied global nickel market, fears of supply issues in Indonesia—the world’s top producer—shifted sentiment in a bullish direction. The surge in Chinese trading volumes also helped support nickel’s price rally in the first week of the year.

Copper has been the standout performer among base metals over the past year, reaching new highs as supply disruptions and U.S. trade policy changes stoked fears of shortages.

At the end of December, copper prices hit a record $12,000 per ton on the London Metal Exchange, marking their largest annual increase since 2009.

The rally continued into 2026, with copper surpassing $13,000 per ton this week—an increase of 16% since the start of December.

Recent months have seen copper prices surge as the Trump Administration threatened tariffs on this vital industrial metal, which is essential for electrification and grid upgrades. Traders have been stockpiling copper in the U.S., driving up prices on the Comex exchange in New York and tightening supplies globally.

According to analysts at Benchmark Minerals, “Copper’s connection to AI-driven data center demand and electrification trends is attracting new investment. Many participants point to increased fund activity, rather than physical demand, as a key factor behind the price surge.”

By Tsvetana Paraskova for Oilprice.com

Top Stories from Oilprice.com

• Saudi Oil Price Cuts Trigger Jump in Asian Demand
• Venezuela’s Fuel Oil Exports to U.S. Drive Asian Premium to Eight-Month High
• Venezuela’s Floating Oil Storage Surges to 29 Million Barrels

Stay Ahead with Oilprice Intelligence

Oilprice Intelligence delivers expert insights before they make headlines. The same analysis trusted by seasoned traders and policymakers is available to you for free, twice a week—so you’ll always understand the market’s next move before the crowd.

Gain access to geopolitical analysis, exclusive inventory data, and insider market trends that influence billions in trades. Plus, receive $389 worth of premium energy intelligence at no cost when you subscribe. Join over 400,000 readers—sign up now for immediate access.