Copper Market Faces Surplus Pressures as Technical Signals Point to Uncertainty

Copper prices fell to $4.75 per pound on June 20, 2025, down 1.10% from the previous day, according to official CFD market data.

This drop follows a period of relative stability but highlights renewed market anxiety as fundamental and technical factors converge to create an uncertain outlook.

The International Copper Study Group (ICSG) projects a global surplus of 289,000 tonnes for 2025, more than double last year’s figure. This surplus results from a 2.3% rise in global mine production.

Significant contributions came from new and expanded operations in the Democratic Republic of Congo, Mongolia, and Russia. Meanwhile, smelter capacity continues to expand, particularly in China.

This is intensifying competition for raw material and driving treatment and refining charges (TCRC) into negative territory. Smelters now pay miners to process concentrate, a situation not seen in decades, as confirmed by recent contract negotiations and market data.

Despite these supply-side pressures, demand growth remains muted. Trade tensions, especially the threat of new US tariffs, have started to weigh on consumption in key markets.

Chinese demand shows resilience but lacks the strength to offset rising global supply, and Western demand remains steady but unspectacular.

Recent Chinese policy support, including lower lending rates, provided only brief relief to the copper market, as supply concerns quickly regained dominance. Technical analysis of the daily and 4-hour charts confirms a market at a crossroads.

Copper Market Faces Conflicting Signals Amid Inventory Declines

The daily chart shows copper hugging the lower Bollinger Band, with price action consolidating above a critical support level at $4.77. The 50-day and 200-day moving averages are converging, reflecting a loss of momentum.

The Relative Strength Index (RSI) sits at 49.15 on the daily chart, indicating neutral conditions, while the 4-hour chart’s RSI at 38.29 suggests short-term oversold territory.

The Moving Average Convergence Divergence (MACD) remains negative on both timeframes, confirming persistent bearish momentum.

Volumes have not indicated a decisive shift in sentiment, and ETF flows remain stable, with no major inflows or outflows reported over the last 24 hours.

LME copper inventories continue to decline, now near multi-year lows, but this tightening has failed to spark a rally as US inventories rise and global surplus projections dominate the narrative.

The copper market’s story today is one of conflicting signals. Surplus forecasts, negative smelter margins, and muted demand exert downward pressure, while technical support levels and low exchange inventories provide a floor.

Market participants now wait for new catalysts, such as policy shifts or unexpected supply disruptions, to break the current stalemate. Until then, copper’s direction will likely remain range-bound, with risks skewed to the downside if surplus conditions persist.

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