Key Points
- Copper, nickel, and zinc prices fell on Wednesday as traders took profits.
- The pullback follows a massive rally in industrial metals over the past few weeks.
- Copper rallied more than 40% last year, its best performance since 2009.
- The long-term outlook for these metals remains bullish, driven by demand from EVs and AI.
Copper prices slid from a record high on Wednesday as traders decided to cash in on the metal’s recent spectacular run. Copper, along with other industrial metals like nickel and zinc, fell more than 2% as the market took a breather after a couple of weeks of sharp gains.
The recent rally was largely driven by a flood of investment in China’s domestic metals markets and a series of major mine outages that squeezed global supply. Copper rallied more than 40% last year, its best performance since 2009.
The rally’s speed and size have some analysts worried that the market could be in for a sharp correction. “We are seeing a broad retreat in most markets, as is typically the case when there are oversized price moves,” one analyst said.
Nickel also had a wild ride, with prices surging as much as 10.5% on Tuesday, its biggest one-day gain in over three years. The rally was fueled by fears of production cuts in Indonesia, the world’s top supplier, and a wave of buying from Chinese traders. However, prices fell on Wednesday as profit-taking set in.
Despite the short-term pullback, many traders remain bullish on the long-term outlook for these metals. The global push for electrification and the AI boom are expected to drive significant demand for copper in the years ahead. Nickel is also a key component in electric vehicle batteries.
For now, though, the market seems to be taking a well-deserved break. After a year of incredible gains, investors are locking in their profits and waiting to see what the new year will bring.
