Copper Market Retreats as Technical Signals Flash Mixed Messages

Copper prices slipped to $4.67395 per pound in Friday morning trading, marking a modest decline of 0.45%. The red metal continues its May consolidation pattern after April’s dramatic price action that saw both significant gains and sharp corrections.

LME copper settled at $9,537.50 yesterday, down from Wednesday’s $9,649.50 close. The pullback comes amid diminishing LME warehouse inventories, which dropped to 184,650 tonnes from 185,575 tonnes the previous day.

This continues the gradual depletion trend from March when stocks exceeded 260,000 tonnes. The Chinese copper market faces a more acute inventory situation.

SHFE stockpiles have plummeted 67% over ten weeks to just 89,000 tonnes, raising concerns about physical supply tightness in the world’s largest copper consuming nation.

This dramatic destocking contrasts with the International Copper Study Group’s recently doubled 2025 surplus forecast of 300,000 tonnes. Technical indicators show conflicting signals for short-term price direction.

The RSI stands at 58.93, reflecting moderate bullish momentum despite today’s price dip. Copper’s chart reveals a classic consolidation wedge formation with lower highs since April’s spike and a flattening support base around $4.52.

Moving averages present a divided picture. Short timeframes maintain buy signals while the 100-day and 200-day SMAs point toward selling pressure. Bollinger Bands have notably contracted, typically signaling decreased volatility before an anticipated breakout.

Traders are closely monitoring support at $4.60 and resistance at $4.75 for the next directional move. JP Morgan analysts project copper will average $9,225 per metric ton in the second half of 2025, suggesting modest downside from current levels.

They cite “tight microeconomic fundamentals” as providing price resilience despite April’s macro-driven selloff that temporarily pushed prices down 8%. The long-term supply outlook remains concerning for industrial consumers.

S&P Global forecasts that global copper mine production from currently operating assets will peak at 23.5 million tons in 2025-2026 before declining at an average rate of 2.3% annually through 2035.

The International Energy Agency warns that announced projects would satisfy only 70% of expected demand by 2035. Copper’s importance for electrification and renewable energy continues to underpin long-term bullish sentiment despite short-term price volatility.

The market now awaits fresh economic data that might influence Federal Reserve policy decisions, as monetary policy remains a key driver for industrial metals in the current environment.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error

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