Adding variables to the volatile metal market! LME delays opening due to malfunction, copper prices surge by 11% in a single day before falling back.

As the global metals market is experiencing intense fluctuations, the London Metal Exchange (LME) delayed its opening by about an hour on Friday due to a technical glitch, adding more variables to the market. The electronic trading system of the world's largest metal exchange did not start operating until 10:00 am, one hour later than the scheduled time. Several traders mentioned that before receiving notice of the exchange's delayed opening, the market was already speculating on who might be facing huge losses. In response, LME stated in a release that the delay in opening on Friday was a precautionary measure. LME stated: "During routine start-up checks of LMEselect, the team identified a potential issue with a specific component. As a precaution, we decided to delay the market opening while the team investigated." LME expressed satisfaction that they were able to "quickly resolve the issue, enabling us to launch LMEselect with only minimal delay. The exchange stated that the market is currently functioning normally. The timing of this breakdown is extremely sensitive, with nervous market participants dealing with sudden and extreme market fluctuations. Fueled by speculative trading boom, the global metals market has had a dramatic start in 2026. Trading volumes for six basic metals at the Shanghai Futures Exchange hit record highs in January, and this euphoria has spread to the metal prices on LME. The intense fluctuations in the metal market this week are triggered by multiple factors, including US military threats against Iran, the White House's tariff threats against allies such as South Korea and Canada, and the increased demand for physical assets driven by the weakening of the US dollar, all fueling this buying frenzy. Several traders point out that, in a highly tense market, a system breakdown could lead traders hoping to close positions into trouble. If the downtime is prolonged, it will further exacerbate market confusion. KS Commodities Co. trader Zhou Zhentin said: "Many traders feel that the current market behavior has disrupted their trading experience and strategies. This forces everyone who has studied traditional non-ferrous metal trading to turn to the study of gold, artificial intelligence, and geopolitics." In this week filled with frenzy trading, copper has been in the spotlight, driven by optimistic sentiment towards energy transition demand and the steady weakening of the US dollar. Just on Thursday, LME copper prices surged by 11%, marking the largest single-day increase since 2008, reaching a historic high of $14,500 per ton. However, on Friday, after trading resumed, LME copper prices fell, dropping by nearly 4% to $13,239 per ton at the time of writing. Prices of other metals also declined. Analysts at Citigroup wrote in a report that while copper prices may continue to rise in the short term, fundamental demand will be a challenge. The bank pointed out that the copper market may "resist" the soaring prices "at a physical level," with increasing scrap copper supply and the potential for demand destruction, ultimately becoming obstacles. The bank maintains its forecast for copper prices to average $13,000 per ton this year. At the same time, some indicators suggest that the recent situation in the copper market is not tense. The price difference between copper spot prices and three-month futures prices exhibits a contango structure, exceeding $90 per ton, indicating a bearish pattern. The decline in metal prices on Friday was attributed to profit-taking and the strengthening of the US dollar. There are speculations that US President Trump is preparing to nominate Kevin Warsh as the next Federal Reserve chairman, which has boosted the US dollar. Although Warsh's current stance on monetary policy is closer to Trump's, in the market's view, he would be a relatively more traditional and less dovish Federal Reserve chairman. If Warsh eventually succeeds Powell as the next Federal Reserve chairman, "the Fed may become more hawkish, and people may see fewer rate cuts." Regarding the recent trends in the metal market, some market participants said: "At this stage, the market's expectations have become too uniform and need some adjustments. Volatility has also become quite high, so we are more inclined to control risks and avoid excessive involvement." It is worth noting that although global exchanges occasionally experience trading pauses or delays, this event has once again put the issue of LME's system reliability under the spotlight. After the nickel market crisis in 2022, LME underwent comprehensive regulatory reforms, with system stability becoming a focal point of concern. Additionally, this is the second major exchange failure event within two months. In November last year, the CME Group's data center overheated, leading to a trading halt of over 10 hours, affecting stocks, forex, bonds, and commodities trading.