Review of the Copper Market During the 2025 National Day Holiday and Post-Holiday Outlook [SMM Analysis]

During the 2025 National Day holiday, the LME copper market continued its strong momentum from before the holiday, hitting a new high during the break and closing at $10,701/mt on October 8. Although there was a slight downward adjustment intraday, it still hovered at highs. The rise in copper prices was mainly driven by an improvement in macro sentiment and fundamental support, with bullish sentiment not significantly cooling in the short term.

From a macro perspective, US employment and inflation data for September, released during the holiday, were notably below market expectations. Coupled with a slowdown in the PCE price index, this further reinforced the market's belief that the US Fed's tightening cycle was nearing its end or even leading to an early interest rate cut. As a result, US bond yields fell sharply, providing systemic support for commodity prices, including copper. A weaker US dollar reduced the relative cost of dollar-denominated metals, attracting more funds into the commodity market, serving as a key catalyst for the sharp rise in copper prices during the holiday.

Against a backdrop of a warmer macro environment, the fundamentals of the copper market also provided solid support. Currently, global copper concentrate supply remains tight, with some miners lowering their future production guidance during the holiday, and domestic copper anode supply showing clear signs of tightness. Some smelters, constrained by tight raw material supply or maintenance schedules, have slowed the release of refined copper production. The growing supply-demand mismatch in the concentrate market has heightened expectations of tighter finished copper supply in the spot market, further pushing up futures prices. In this context, LME copper prices repeatedly tested previous highs, with rising risk appetite, and the trading logic shifted from cost support to trend reinforcement.

Looking ahead, as the National Day holiday ends, the recovery in downstream demand is slow, with high copper prices significantly suppressing terminal orders. Surveys show that post-holiday, end-users are reluctant to resume operations, especially in traditional consumption sectors such as wire and cable, air conditioning, and home appliances, which are sluggish. With demand failing to quickly follow, social inventory is expected to accumulate after the holiday, increasing the pressure on smelters to sell, and making spot premiums more likely to fall than rise.

Overall, copper prices surged before the holiday due to a combination of a warming macro environment and tight fundamentals, and fluctuated at highs after the holiday. However, considering the weak terminal demand, the expectation of inventory accumulation, and the current situation where high prices are deterring purchases, copper prices face some downward pressure in the near term. The market may enter a phase of fundamental and capital competition in the short term.