Copper Market Steadies at $4.72 Amid US-China Trade Optimism and Supply Tightness

TradingView data shows copper prices trading at $4.7207 this Monday morning, marking a slight decline of 0.35%. Market sentiment improves as China signals willingness to engage in trade talks with the United States.

This development follows recent hints from US President Trump about potential agreements with several Asian economies. Copper has gained approximately 17% since January despite recent volatility.

Friday saw a 1% price recovery to $4.63 per pound as traders responded to positive diplomatic signals. The metal remains down over 3% from last week when disappointing economic data fueled recession fears.

Physical market indicators reveal unprecedented tightness in global copper supplies. LME warehouse stocks have fallen dramatically to just 108,725 tons “on-warrant.”

Available stocks in Asian warehouses hit a one-year low of 42,025 tons. The Shanghai copper market shows steep backwardation with prompt-month contracts commanding a $150/ton premium over three-month futures.

Supply constraints continue to support price levels. Congo has now surpassed Chile as China‘s largest refined copper supplier. Chile projects production will peak at 6 million tons within three years before plateauing.

Copper Faces Supply Constraints Amid Soaring Demand

This supply ceiling emerges just as global demand accelerates. The International Copper Study Group forecasts global mine production will grow by 2.3% in 2025.

This increase may temporarily create a small surplus in the immediate term. Looking further ahead, CRU Group projects a substantial global deficit of 1.2 million tons by 2026.

Electricity demand surged 4.3% in 2024, driven by record temperatures, increased electrification, and digitalization. These factors strengthen copper’s fundamental outlook despite current economic uncertainties.

Technical analysts point to $4.36 as a key support level, with resistance around $4.45. Market participants watch for critical price movements. A break above $5.00 would signal copper has found its price floor and could resume upward momentum.

Conversely, a drop below April’s low of $4.03 might indicate deeper economic troubles. Conservative forecasts expect prices to remain above $9,000 per ton throughout 2025. Some analysts project much higher values if Chinese stimulus accelerates.

The metal sits at the intersection of electrification, decarbonization, and industrial development, creating a structural bull case despite short-term fluctuations.

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