Copper prices plunge amid broad metals sell-off shaking global markets

Yesterday 13:50

By: Dakir Madiha

Copper prices plunge amid broad metals sell-off shaking global markets

Copper prices tumbled sharply on Monday for the second straight session, swept up in a widespread sell-off of commodities that rattled markets from South Africa to London and hammered mining stocks worldwide. The red metal slid toward $5.70 per pound in U.S. trading, extending Friday's steep losses and dropping more than 11 percent from last Thursday's record high above $14,500 per tonne on the London Metal Exchange.

London copper plunged as much as 5 percent early Monday, dipping below the $13,000 per tonne mark after a speculative surge driven largely by Chinese investor interest. The downturn accelerated following U.S. President Donald Trump's Friday nomination of Kevin Warsh as Federal Reserve chair, a move markets view as signaling tighter monetary policy. This propelled the U.S. dollar index above 97, pressuring dollar-denominated commodities.

Analysts noted Warsh's pro-dollar stance, rooted in his emphasis on inflation control and skepticism toward quantitative easing, as particularly bearish for gold. The sell-off intensified after CME Group announced higher margin requirements on precious metals futures effective Monday's close: gold margins rising from 6 percent to 8 percent, and silver from 11 percent to 15 percent. Elevated margins typically force traders to unwind positions, fueling further downside.

South African stocks bore the brunt, with the FTSE/JSE All Share index plunging up to 6.1 percent, its steepest drop since March 2020 before paring losses to around 3 percent. Major miners like Sibanye Stillwater, Gold Fields, and AngloGold Ashanti led the retreat. In London, the FTSE 100 fell about 0.4 percent, dragged by mining and energy shares: Glencore and Anglo American each down around 4 percent, Antofagasta over 5 percent, Fresnillo 7.4 percent, and Endeavour Mining nearly 7 percent.

The rout spread beyond copper to precious metals and energy. Gold dropped about 5 percent to around $4,600 per ounce after Friday's near-10 percent plunge, its worst daily fall since 1983. Silver cratered over 10 percent, extending Friday's record 30 percent drop, the sharpest since 1980. Brent crude also slid nearly 5 percent toward $66 per barrel as U.S.-Iran negotiation news eased geopolitical risk premiums.

Long-term copper fundamentals remain supportive, with tight supply from decades of mining underinvestment and steady demand from AI-related infrastructure. Yet short-term end-user demand stays muted ahead of China's Lunar New Year on February 15.