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| Metal Market |
China Drives Record Trading in Industrial and Precious Metals
The global metals market surge originates in China, where retail investors flood futures exchanges. Shanghai and Guangzhou exchanges tightened rules 38 times to curb extreme volatility. Tin, silver, and lithium volumes reached record highs, exceeding annual global physical usage. Consequently, industrial hedgers face stop-outs, fueling further price acceleration.
Retail Momentum and Option Leverage Amplify Volatility
Meanwhile, CME micro copper and gold contracts attracted retail traders outside China, driving physical-equivalent volumes over one million metric tons. Delta-hedging of options magnifies price swings, as sellers buy rising metals to cover positions. This mechanism intensifies both upward rallies and sudden corrections, particularly in silver.
Investment Themes Collide Amid Global Demand
As a result, the surge links macro fears and industrial trends. Dollar debasement concerns drive investors toward hard assets, while energy transition and IoT trends increase demand for base metals. Social media accelerates these themes, spreading speculative appetite worldwide. Analysts warn volatility will persist until markets rebalance physically and digitally.
ScrapInsight Commentary
China’s speculative surge highlights industrial metals’ vulnerability to retail-driven momentum. Prices of tin, nickel, and silver may remain volatile. Regulatory tightening is crucial to protect supply chains while maintaining investment interest in strategic metals.
