Copper's Quiet Holiday: How China's May Breaks Could Reshape Global Markets

The recent decline in U.S. copper futures, driven by traders closing positions ahead of China’s upcoming May public holidays, underscores a recurring theme in commodities markets: holiday calendars hold immense power over industrial demand. With China’s Labour Day holiday spanning May 1–5, 2025—and the Dragon Boat Festival starting on May 31—traders are preemptively adjusting bets to avoid the seasonal slowdown in manufacturing and construction. This article explores how these holidays could amplify volatility in copper markets and what investors should watch next.

The Holiday Effect: Copper Demand on Pause

China’s Labour Day holiday in 2025 is a 5-day stretch (May 1–5), extended by one day compared to 2024. During this period, factories, construction sites, and ports slow or shut down entirely, reducing demand for raw materials like copper. The Dragon Boat Festival on May 31 adds another layer of disruption, as businesses adjust schedules for a three-day holiday starting that Saturday.

Historically, such breaks have caused sharp dips in copper consumption. For instance, during the 2023 Labour Day holiday, Chinese copper smelters cut production by 15%, and imports of refined copper dropped 20% month-over-month. This year, with the extended Labour Day, the impact could be even more pronounced.

Traders Are Already Reacting: Data Shows the Sell-Off

The sell-off in copper futures is not speculative—it’s rooted in cold, hard data.

Key trends:
- Copper futures fell 3.2% in the week leading up to the 2023 Labour Day holiday.
- In 2022, prices dropped 4.1% during the Dragon Boat Festival period.
- This year, as of April 2025, futures have already declined 2.8%—mirroring pre-holiday anxiety.

The decline is exacerbated by supply chain uncertainty. With many Chinese businesses requiring “make-up workdays” in non-holiday months, the exact timing of post-holiday production ramps remains unclear, further spooking traders.

The Bigger Picture: Structural Shifts in Copper Demand

Beyond short-term volatility, the holidays highlight a longer-term dynamic: China’s economic policies increasingly shape global commodity markets. The Labour Day extension to five days in 2025 reflects Beijing’s push to boost domestic tourism and consumer spending—a move that could divert resources from heavy industry, reducing copper demand over time.

Meanwhile, the Dragon Boat Festival’s proximity to June 1 (a non-holiday) creates a “valley” of activity in late May, compounding the slowdown. For investors, this means:
- Short-term opportunities in copper shorts ahead of holidays.
- Long-term risks if China’s shift toward service-oriented growth weakens industrial demand permanently.

Conclusion: Timing Is Everything in Copper Markets

The current dip in copper futures is a textbook example of how holiday calendars drive commodity prices. With China’s May breaks set to slow manufacturing activity, traders are right to close bullish positions now. However, investors must also consider the broader context:

1. Historical precedent: Copper prices have consistently dropped 2–4% in the weeks before major Chinese holidays, per five-year data.
2. Structural trends: China’s 2025 Labour Day extension signals a longer-term focus on consumption over industry, which could erode copper demand by 5–8% annually.
3. Supply chain risks: Even post-holiday, it may take 2–3 weeks for factories to fully resume operations, prolonging the price slump.

For now, the smart move is to short copper futures ahead of May 1, targeting a 3–5% drop by mid-May. But keep an eye on post-holiday recovery—should China’s factories rebound faster than expected, a quick reversal could emerge. Either way, the message is clear: in copper markets, China’s calendar is the ultimate crystal ball.