Copper Markets Edge Lower as Tariffs and Supply Shocks Shape Price Action

Copper markets faced a sharp setback over the past week, as prices on August 18, 2025, show LME copper around $9,759 per ton and COMEX futures at $4.53 per pound, reflecting a small drop overnight.

Markets reacted first to a US tariff on copper products. This move upended trade flows, caused confusion among buyers and sellers, and led traders to adjust positions quickly.

After the announcement, a wave of selling hit copper, breaking it through important support levels. Technical signals from the daily and four-hour charts highlight just how dramatic this move was.

The copper price crashed to the lower end of its Bollinger Bands, with the Relative Strength Index sinking well into oversold levels below 35—both classic signs of a market under pressure and searching for stability.

The MACD, a tool used to spot momentum changes, turned deep negative and has only just hinted at weakening selling pressure in recent sessions.

Volume, which often tells the real story, spiked as the drop started but then faded. This pattern suggests participants became hesitant, preferring to watch rather than risk more losses.

Copper Struggles as Supply Cuts Meet Weak Demand

At the same time, global factors made things even more complicated. Chile’s Codelco, the world’s biggest copper producer, announced a cutback at its El Teniente mine, removing up to 30,000 tons from the market.

Yet LME warehouse stocks remained stable, showing that end-user demand isn’t strong enough to drain inventories, even with less supply.

Investment flows into copper Exchange Traded Funds (ETFs) in the US turned negative, as investors lost faith in a quick rebound. Meanwhile, some Asian funds attracted new money from people betting today’s supply problems could lead to higher prices soon.

The Global Liquidity Index NDQ, a measure of risk appetite seen as the yellow line in the chart, slipped lower all week. This reflects shrinking financial liquidity—less money moving into risky assets like copper—adding more pressure.

Added together, these events push copper into a tough spot. Producers face limits, but buyers are cautious. Policy shocks and weaker manufacturing orders weigh on demand.

The past week proved that copper, often called “Dr. Copper” for its reputation as an economic indicator, now tracks not just global growth but also the unpredictable hand of government policy and short-term trading flows.

For now, prices hover above new lows, with technicals warning that the market needs clearer news, either from demand picking up or supply getting tighter, before confidence returns.

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