Copper Holds Near Five-Month High Amid Supply Redirection Crisis – March 21, 2025
Copper prices settled at $9,914.00 per metric ton this morning, showing a slight pullback from yesterday’s five-month high as markets digest recent developments in global trade policies and physical supply constraints.
Copper has maintained its strong position near the $10,000 level after reaching a five-month high yesterday, when prices topped $10,000 per tonne on the London Metal Exchange.
The surge followed heightened market speculation regarding potential US import tariffs. During Asian trading hours, prices experienced moderate volatility before settling at current levels, reflecting some consolidation after the recent rally.
Yesterday’s trading session saw significant volume increases, with activity levels approximately 7 times higher than average daily volumes. This surge in trading activity highlights the market’s sensitivity to ongoing policy developments and shifting trade flows.
Global Market Dynamics
LME (London Metal Exchange): The cash-settlement price has climbed steadily from $9,759.00 on March 14, reflecting continued bullish sentiment in the European trading session. LME warehouse stocks continued their downward trend, reaching 233,750 tons as of the latest report, down from 237,200 just a day earlier.
COMEX (US): The premium for US copper contracts reached an unprecedented level this week, with the differential between COMEX and LME prices exceeding $1,200 per ton on Wednesday. This record spread underscores the market’s response to potential trade barriers.
Shanghai Futures Exchange (SHFE): Chinese copper prices have moved higher in sympathy with global markets, though concerns about reduced import volumes to China are emerging as traders redirect shipments to the US market ahead of potential tariffs.
Key Market Drivers
US Tariff Speculation: The Trump administration’s Section 232 investigation into copper imports continues to drive market sentiment, with Goldman Sachs and Citigroup both anticipating 25% import levies by year-end. This investigation has triggered a rush to ship copper to US ports.
Supply Redirection: Between 100,000 and 150,000 metric tons of refined copper are expected to arrive in US ports in the coming weeks, potentially establishing a new monthly import record. Traders are booking additional warehousing space in New Orleans and Baltimore to accommodate these shipments.
Chinese Economic Stimulus: Chinese authorities recently unveiled a plan aimed at boosting consumption by increasing incomes, which provided additional support to copper prices earlier this week. However, demand from China’s property sector remains subdued.
Production Constraints: Top copper supplier Codelco warned that production this quarter will be similar to or slightly below year-ago levels due to maintenance work at Chile’s El Teniente operation. This comes as Chilean output had already declined by 24% month-over-month in January.
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| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| GOLD | 4,461 | +1.78% | +33.20% | 4,383 | 4,503 | 4,421 | 139,824 |
| SILVER | 65.59 | +1.26% | +73.05% | 64.77 | 66.98 | 64.81 | 46,406 |
| BRENT | 88.88 | -0.03% | +34.42% | 88.91 | 90.07 | 88.12 | 29,713 |
| WTI | 83.11 | -0.11% | +31.57% | 83.20 | 84.35 | 82.40 | 166,848 |
| COPPER | 6.61 | +0.03% | +46.70% | 6.61 | 6.71 | 6.61 | 39,543 |
| LITHIUM | 75.20 | +1.47% | +62.95% | 74.11 | 75.80 | 75.08 | 89,275 |
| IRON ORE | 161.91 | — | +58.10% | 161.91 | 161.91 | 1 | |
| SOY | 1,184 | +3.20% | +17.05% | 1,148 | 1,199 | 1,168 | 163,179 |
| CORN | 480.50 | +10.02% | +29.34% | 436.75 | 480.75 | 459.50 | 341,248 |
| WHEAT | 655.00 | +3.93% | +29.70% | 630.25 | 657.75 | 631.50 | 128,793 |
| COFFEE | 317.25 | -5.51% | +0.67% | 335.75 | 321.20 | 313.55 | 21,747 |
| SUGAR | 16.43 | -1.79% | -3.01% | 16.73 | 17.11 | 16.22 | 171,992 |
| COCOA | 5,719 | +3.18% | -34.96% | 5,543 | 5,779 | 5,574 | 26,773 |
| ORANGE JUICE | 138.55 | -0.47% | -45.38% | 139.20 | 141.05 | 137.50 | 703 |
| COTTON | 85.03 | +2.33% | +26.78% | 83.09 | 82.90 | 81.96 | 16,546 |
| BEEF | 223.60 | -3.93% | -5.18% | 232.75 | 226.40 | 223.00 | 16,126 |
| CATTLE | 339.10 | -3.16% | -1.82% | 350.17 | 345.50 | 338.60 | 10,164 |
| USD/BRL | 5.16 | +0.01% | -5.13% | 5.16 | 5.18 | 5.14 | — |
Technical Analysis
Copper continues to trade within the previously identified congestion band between $9,751 and $9,950. The market is working its way through this resistance zone, with the next significant technical barrier at the $10,000 psychological level.
The bullish Andrews pitchfork pattern established from late December 2024 to early February 2025 remains intact, showing the market’s bullish angle of attack. While we’ve seen some consolidation near current levels, the overall technical structure remains positive.
Comparison with Gold
The copper-gold ratio has seen a significant breakout as of March 20, 2025, a development that typically signals economic optimism. While copper trades near $9,914, gold has reached record highs of $3,057.21 per ounce yesterday before easing slightly this morning due to dollar strength.
The divergence between industrial metals like copper and precious metals like gold suggests that markets are pricing in both economic growth prospects and inflation concerns simultaneously.
Market Outlook
Analysts maintain a bullish outlook for copper, with Citigroup expecting LME copper to hit $10,000 per tonne in the next three months amid tight global supplies. Morgan Stanley also anticipates further gains in copper prices, particularly as market participants position themselves for potential US tariffs.
The redirection of global copper flows from China to the US is creating substantial disruptions, with Chinese port shipments for April and May potentially dropping by as much as a third compared to the same period last year. This shift could exacerbate the global supply deficit, which Goldman Sachs already expected to reach 180,000 tons this year.
As Codelco Chairman Maximo Pacheco noted earlier this week, “Everyone sees demand for copper as very strong and they all ask Codelco for more copper”, highlighting the fundamental supply constraints supporting current price levels.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error
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