Copper Markets Surge Above $4.80 as Supply Deficit Concerns Override Surplus Forecasts

Copper markets gained momentum during Monday morning trading sessions, with prices climbing above $4.80 per pound according to market data from major exchanges.

The metal traded around $4.89 per pound on futures contracts, representing a notable advance from Friday’s closing levels of $4.6525 per pound recorded by Trade Service.

Technical indicators paint a mixed picture for the red metal’s near-term trajectory. The daily chart reveals copper prices testing upper Bollinger Band resistance levels while moving averages suggest underlying bullish momentum remains intact.

The Relative Strength Index approaches overbought territory above 70, indicating potential for short-term consolidation. Volume patterns show increased participation during recent upward moves, confirming buyer interest at current levels.

Market fundamentals present conflicting signals that continue to drive volatility across global exchanges. The International Copper Study Group projects that global mined copper output will rise approximately 2.3 percent in 2025.

This increase, reaching 23.5 million metric tons, is driven by major projects such as Kamoa-Kakula in the Democratic Republic of Congo and Oyu Tolgoi in Mongolia, which are boosting production capacity.

Copper Market Faces Short-Term Tightness

Despite increased supply projections, physical market tightness persists across key regions. Shanghai copper markets display their steepest backwardation structure in nearly two years, with prompt-month contracts commanding $150 per ton premiums over three-month futures contracts.

This pricing structure signals immediate supply constraints despite longer-term surplus forecasts. The ICSG forecasts a global copper surplus of 289,000 tons in 2025, more than doubling last year’s excess of 138,000 tons.

However, refined copper production growth of nearly 3 percent this year, primarily driven by Chinese smelter capacity expansion, may not adequately address regional supply imbalances.

Recent price action reflects growing market awareness of potential structural deficits developing across the copper complex. World Bank data shows copper averaged $9,176.80 per metric ton in April 2025, declining 5.78 percent from March levels but remaining above year-ago comparisons.

Trade policy uncertainty continues influencing market sentiment, particularly regarding potential United States tariff implementations affecting Chinese copper trade flows. The East-West price differential remains elevated, reflecting ongoing geopolitical tensions and supply chain disruptions.

Mining executives express cautious optimism about medium-term demand prospects despite near-term economic headwinds. Sam Spring, CEO of Kincora Copper, noted the market stands at an interesting junction seeking direction, emphasizing tensions between supply constraints and evolving demand patterns.

Current market positioning suggests traders remain divided between surplus forecasts and immediate supply tightness indicators. The technical picture supports continued upward momentum provided volume participation increases and resistance levels yield to buying pressure.

Global copper consumption growth projections face downward revisions amid trade policy uncertainties and economic slowdown concerns, particularly regarding Chinese demand patterns expected to moderate significantly through 2026.

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