Copper Market Holds Steady as Global Supply Chains Tighten and Technicals Signal Caution

Copper prices edged lower over the past 24 hours, with the London Metal Exchange (LME) cash settlement closing at $9,730 per tonne on June 11, down from $9,854 the day before.

TradingEconomics data shows spot copper at $4.80 per pound on June 12, reflecting a modest 0.04% decline. The market remains sensitive to ongoing supply chain disruptions, tariff threats, and shifting inventory patterns.

Official LME data confirms a persistent drawdown in global copper stocks. Inventories fell to 119,450 tonnes on June 11, continuing a multi-week trend.

Market participants attribute this to accelerated exports from major producers and aggressive stockpiling in the United States ahead of potential tariffs.

Goldman Sachs estimates up to 60% of global reported copper inventories could reside in the US by the third quarter, even though the country accounts for just 6% of global refined demand.

Shanghai Futures Exchange (SHFE) data points to a sharp fall in Chinese inventories, with recent reports citing a 67% drop over ten weeks.

This tightening has driven higher premiums for imported copper in China, though the latest session saw a rebound in the SHFE/LME price ratio and more active market offers.

However, overall transaction volumes remain subdued, and some cargoes initially bound for China are now rerouting to Europe, reflecting the evolving supply landscape.

Copper Market Faces Regional Price Divergence

Macroeconomic factors continue to weigh on sentiment. The US dollar has weakened, but the threat of a 25% tariff on copper imports into the US, alongside new export duties from Chile and regulatory changes in the EU, has fragmented global trade flows.

These policy moves have led to a pronounced divergence between COMEX and LME copper prices, with a premium of over $600 per tonne for US contracts as traders seek tariff-compliant inventories.

Technical analysis of the daily chart shows copper consolidating below resistance at $4.90 per pound. The 50-day and 200-day moving averages are converging, suggesting a potential trend inflection.

The Relative Strength Index (RSI) stands at 52.87, indicating neutral momentum. The Moving Average Convergence Divergence (MACD) remains slightly positive, but the histogram is flattening, signaling waning bullish momentum. Bollinger Bands have narrowed, reflecting reduced volatility.

On the 4-hour chart, copper tests support near $4.81–$4.84. The RSI at 43.48 approaches oversold territory, while MACD is negative, confirming short-term weakness.

If this support zone fails, further downside toward $4.76 is possible. Upside remains capped below $4.90, a level that has repeatedly halted rallies in recent weeks.

Fundamentally, the market faces a precarious balance. Demand for copper continues to rise, driven by electrification and infrastructure spending, but supply constraints and trade dislocations have created regional shortages and price volatility.

Market participants remain cautious, awaiting clarity on trade policy and watching inventory trends closely for signs of further tightening or relief.

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