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 pattern from before the holiday, reaching a new high during the holiday period and closing at $10,701/mt on October 8. Although there was a slight downward adjustment intraday, it still fluctuated at highs overall. The rise in copper prices was mainly driven by the resonance of improved macro sentiment and fundamental support, with bullish sentiment not significantly cooling in the short term.

From a macro perspective, US non-farm employment and inflation data for September, released during the holiday, were both significantly below market expectations. The weaker-than-expected non-farm payroll growth, coupled with a slowdown in the PCE price index, further reinforced the market's judgment that the US Fed's tightening cycle is nearing its end or may even see an early interest rate cut. As a result, US bond yields fell sharply, and the US dollar index pulled back significantly from its highs, providing systemic support for commodity prices, including copper. A weaker dollar reduced the relative cost of dollar-denominated metals, attracting more funds into the commodity market, which became a key catalyst for the sharp rise in copper prices during the holiday.

Against the backdrop of a warmer macro atmosphere, the fundamentals of the copper market also provided solid support. Currently, global long-term supply of copper concentrates 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 pace of refined copper production release. 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, and high copper prices have significantly suppressed terminal orders. Surveys show that post-holiday, end-users' willingness to start operations is weak, especially in traditional consumption sectors such as wire and cable, air conditioning, and home appliances. With demand failing to quickly follow, social inventory is expected to accumulate after the holiday, increasing the pressure on smelters to sell, and making it more likely for spot premiums to fall than rise.

Overall, copper prices surged significantly before the holiday due to the resonance of a warming macro environment and tight fundamentals, and maintained high fluctuations after the holiday. However, considering the weak terminal demand, the expectation of inventory accumulation, and the current situation where high prices are suppressing purchases, copper prices face certain downward pressure in the future. In the short term, the market may enter a phase of interplay between fundamentals and capital flows.