Copper Edges Lower as Trade Talks and Tight Supplies Drive Volatility

TradingView and LME data show copper CFDs trading at $4.61 per pound on May 8 morning EST. Traders see a 1% drop from yesterday’s $4.67 close.

The LME cash price reached $9,486 per metric ton, down from $9,500 on May 6. COMEX futures last settled at $4.72 per pound, while Shanghai nearby contracts edged lower.

Markets reacted to news of upcoming trade talks in Switzerland between China’s Vice Premier He Lifeng and US Secretary Scott Bessent. China’s central bank cut key policy rates overnight to support growth amid US tariff concerns.

Major economies’ manufacturing PMI readings fell to year-low levels, signaling weaker demand. Traders note North American copper warehouse stocks surged as manufacturers stockpiled ahead of possible new duties.

US copper imports rose 20% from April as shippers rushed metal stateside. LME inventories plunged 62% in six months to 193,975 metric tons while Shanghai stocks dropped 45% year-to-date, underscoring acute tightness.

ETF flows showed modest net inflows as investors balanced risk and opportunity. COMEX futures gained 16% year-to-date but fell briefly below $4.70 per pound during yesterday’s volatility.

Trading volumes reached their highest hourly rate in nearly a decade on May 7, reflecting extraordinary participation. Copper ETFs saw modest inflows last week, reflecting cautious optimism.

Supply disruptions spurred a shipping rush and squeezed global availability. State Grid’s Q1 orders rose 25% and equipment investment climbed 60%, forcing wire makers to bulk buy copper.

Copper Market Update

EV production and appliance orders grew double digits during China’s holiday. Freeport McMoRan CEO Kathleen Quirk said, “copper demand remains strong globally,” yet Zijin Mining’s Wei Lai warns of slower H2 buying.

Physical data reinforce scarcity despite growth downgrades. LME recorded its highest hourly volume in nearly a decade on May 7. COMEX futures climbed over 16% year-to-date but fell under yesterday’s pressure.

Shanghai three-month futures settled at $9,462.50 per ton. Backwardation widened on the LME, signaling immediate demand pressure, and traders watched the narrow spread between cash at $9,486 and three-month at $9,462.50 for signs of tightness.

Technically, copper trades below its 200-hour moving average, signaling a bearish short-term bias. Bollinger Bands widened, indicating elevated volatility. RSI sits near 50, suggesting neutral momentum, while MACD stays below its signal line, confirming weakness.

Volume spikes 30% above its 30-day average on May 7 reflected heavy selling. Key support lies at $4.54, resistance at $4.81 per pound. Traders await today’s US ISM manufacturing report and Chinese trade data for fresh cues.

A break below $4.54 may trigger further selling, whereas a move above $4.66 could renew the rally. Markets will reassess when China releases trade balance figures later this week. Supply risks and trade policy developments will shape the near-term copper trajectory.

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