Copper just hit all-time highs, but here's the plot twist: Chinese demand has virtually disappeared. This disconnect is revealing something crucial about how markets actually work.

When prices spike to record levels, you'd expect buyers to line up. Instead, the opposite happened. China, typically the world's largest copper consumer, has dramatically pulled back from purchases. The reason? Simple economics. At these stratospheric price points, demand destruction kicks in—manufacturers delay purchases, seek alternatives, or scale back production entirely.

This pattern reflects a broader economic reality. When commodities reach extreme valuations, price sensitivity accelerates. Industries dependent on copper for wiring, construction, and manufacturing face margin pressure, forcing them to rethink supply chains and consumption patterns.

What makes this significant for markets? Commodity price movements—especially in copper, often called "the metal with a PhD in economics" for its sensitivity to growth cycles—act as early indicators for broader economic conditions. A gap between record prices and collapsing demand suggests traders are pricing in expectations that don't match real-world consumption. This kind of disconnect often precedes market corrections or fundamental repricing across asset classes.

For portfolio strategists watching macro trends, copper's current dynamic warrants attention as a potential signal of economic sentiment shifts.