London Metal Exchange (LME) copper prices experienced epic volatility on Monday (April 8) : in the opening 15 minutes of the market plunged 7.7% to $8,105 / ton, followed by a violent rebound of nearly $1,000 in two hours, the largest intraday amplitude in 16 years. Behind this thrilling market, Chinese buyers staged a textbook "contrarian bottom-hunting" drama in the market chaos caused by Trump's new tariff deal. The trigger for the tariff shock to unbalance the global copper market can be traced back to the Trump administration's aggressive tariff plan unveiled last week - a 10 per cent base tariff on all imports and an additional 34 per cent punitive tariff on Chinese goods. The policy directly disrupted the flow of global copper trade, and a large amount of inventories had been moved to the United States in advance to avoid costs, leading to a short-term supply tightening in China. With markets closed for the Qingming Festival holiday, Chinese buyers failed to participate in the first round of copper price collapse last week, and faced a rare inversion of copper prices in Shanghai and London at the start of trading on Monday (Shanghai copper prices were at a premium of $1,000 / ton over London), opening up import arbitrage space instantly. As the world's largest copper consumer (accounting for more than 50%), the actions of Chinese buyers have always had the power to rewrite the market playbook. Trading data showed that copper trading volume in the second hour of Monday broke the daily record since Trump's election in 2016, with Chinese manufacturers and importers entering decisively at the psychological level of $8,500 / ton. "When the Shanghai copper premium shot up to $87 a tonne (a two-and-a-half-year high), people from a certain country buyers were almost buying," the head of commodities at an international investment bank told the Financial Times. "The buying power made the bears completely panic." This is a familiar story: During the 2008 financial crisis, China's $4 trillion stimulus package sent copper prices soaring from $2,800 to $8,900 a ton; After the epidemic in 2020, the recovery of Chinese demand also led to a V-shaped reversal of copper prices. "When Chinese buyers show up at low prices, the market tends to sniff out policy action in advance," analysts at Citigroup said. Although copper ended the day down 0.5 percent at $8,732 a ton, it reached an intraday high of $8,900 a ton, just a step away from fully covering the jump.
