Copper markets experienced one of their most volatile trading sessions in over a decade on Monday, as a steep early-morning plunge in prices was met with a wave of buying from Chinese consumers. The surge in demand helped reverse losses and triggered a dramatic intraday rebound, even as concerns about global economic growth and an escalating trade war continued to weigh heavily on other financial markets.

Prices on the London Metal Exchange (LME) dropped sharply at the start of the trading day, falling as much as 7.7% within the first 15 minutes. The rapid selloff briefly pushed copper below $8,500 per metric ton, sparking alarm among traders and analysts. However, by late morning, the market had staged a remarkable recovery, with prices rising by nearly $1,000 in just over two hours. According to LME data, it was the largest intraday move since the 2009 financial crisis.

Traders familiar with the situation said that the initial decline was met with strong buying interest from Chinese fabricators and importers. With copper prices on the LME falling significantly below domestic Chinese rates, importers rushed to take advantage of the price differential. The sudden jump in demand came after Chinese markets had been closed on Friday for a public holiday, during which Beijing announced its response to recently imposed U.S. tariffs. China, which is the world’s largest consumer of copper, has a well-established history of stepping in during periods of price weakness. Similar patterns of opportunistic buying were seen during the aftermath of the 2008 global financial crisis and again in 2020, following the onset of the COVID-19 pandemic.

This time, however, the copper market is being rocked by heightened geopolitical tensions and fears of an economic slowdown. The latest market rout began last week after former U.S. President Donald Trump announced a new round of tariffs, including broad measures that could impact metals trade. In response, China unveiled countermeasures, further rattling markets.

Before Monday’s reversal, copper was on track for a more than 16% decline over three days — a level of volatility not seen since the height of the 2008 crash. The sheer speed and scale of the collapse triggered a spike in trading volumes. During the second hour of LME trading, volumes reached their highest level for any hour since Trump’s initial election in 2016.

While the rebound was significant, analysts cautioned that further price declines remain possible. Citigroup Inc. issued a note on Monday forecasting short-term copper prices between $7,500 and $8,000 per ton. Bank of America went further, suggesting prices could fall to as low as $5,700 amid deteriorating economic indicators and tariff-related disruptions.

Adding to the volatility, copper flows have been shifting globally in recent months. Anticipating the potential for U.S. import tariffs, traders have been redirecting metal from China to the United States. That dynamic has pushed U.S. copper prices to a premium, encouraging a surge in shipments ahead of any formal trade restrictions. As a result, Chinese consumers have seen a tightening in domestic supply, increasing the urgency to purchase material once prices dropped.

The price gap between copper traded in Shanghai and on the LME reached nearly $1,000 per ton at one point on Monday — a rare and extreme disparity that made importing copper into China highly lucrative. Copper premiums in China, a measure of the extra cost buyers are willing to pay over futures prices, jumped to $87 per ton, the highest level since December 2023. Several traders said they were unable to satisfy all the demand from Chinese buyers, as much of the metal had already been diverted to fulfill U.S.-bound shipments.

Whether the Chinese buying will be sufficient to stabilize the copper market remains uncertain. The macroeconomic backdrop continues to cast a long shadow over metals markets, with investors now reevaluating their growth forecasts amid the latest phase of trade hostilities between the world’s two largest economies.

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.