Copper Price Analysis: Technical Resistance at $4.69 as ETF Inflows Signal Investor Confidence

As of 7:06 AM WEST on May 20, 2025, copper is trading at $4.6335 per pound on COMEX, showing slight stability after yesterday’s significant gains.

The market is experiencing a period of consolidation following Monday’s 1.71% rally, which represented the largest one-day percentage gain since May 13, 2025.

Copper prices showed mixed movements during Asian trading hours, with LME copper opening at $9,500.5/mt before fluctuating higher in early trading, then pulling back to touch a low of $9,495/mt.

This follows yesterday’s strong performance where front-month COMEX copper for May delivery gained 7.80 cents per pound. The overnight price action reflects persistent tension between macroeconomic concerns and physical market tightness.

Despite recent volatility, copper remains up 16.24% year-to-date, though still 11.17% below its record high of $5.216 reached on March 26, 2025.

Regional Market Performance

China Market

Spot #1 copper cathode in North China is trading at par to slight premiums today, though trading activity has declined compared to previous sessions.

The Shanghai copper market continues to experience backwardation, with prompt-month contracts commanding premiums over three-month futures, signaling ongoing tightness in the physical market.

Chinese buyers have been strategically accelerating purchases ahead of potential trade policy changes, with copper imports surging to record levels in recent months.

However, broader economic concerns in China persist, with copper usage growth expected to slow to 0.8% in 2026, down from 2.0% this year.

US Market

The COMEX market has seen significant inventory builds in recent weeks, with stocks reaching multi-year highs. This surge in US inventories has reduced the tariff premium that had developed in anticipation of potential import restrictions.

The market is currently digesting the implications of the recent 90-day tariff truce announced between the US and China.

European Market

LME copper stocks have decreased to a one-year low of 179,375 tons as of May 16, 2025, with approximately 40% of the remaining stock awaiting physical load-out.

This decline in available inventory has shifted the cash-to-three-month spread to a backwardation, contrasting with the contango seen in US markets and reflecting regional supply differences.

Fundamental Drivers

Supply Constraints

Global copper mine output is projected to reach 23.2 million tonnes in 2025, representing just a 3% increase from 2024 levels. This modest growth stems primarily from capacity expansions at existing operations and new mine developments in Chile, the Democratic Republic of Congo, and China.

Several factors continue to hamper more substantial production increases:

• Declining ore grades at established mines
• Limited access to project funding for junior miners
• Energy access disruptions in key mining regions
• Increasingly complex regulatory environments
• Weather-related operational challenges

The International Copper Study Group (ICSG) forecasts global copper mine production to grow by 2.3% in 2025, reaching 23.5 million tonnes, with a slightly higher growth rate of 2.5% expected in 2026.

Demand Outlook

The ICSG has recently downgraded its global copper consumption forecasts, citing uncertainty surrounding international trade policies. The group now anticipates growth of 2.5% this year, a decrease from its previous estimate of 2.7%.

Interestingly, the ICSG has doubled its global surplus forecast for 2025 to nearly 300,000 tonnes, citing a combination of rising production and softening demand.

This contrasts with more bullish forecasts from investment banks, with ANZ projecting copper demand to grow by 3.5% year-over-year to 28 million metric tons, resulting in a market supply deficit of 500,000 metric tons.

Investment Flows

The Sprott Copper Miners ETF (COPP) closed at $20.26 on May 16, down $0.34 (-1.65%) for the session. The fund has seen a 5.57% cumulative increase since inception, reflecting investor interest in copper mining equities despite recent price volatility.

The Global X Copper Miners ETF has climbed 13% in 2025, signaling strong investor interest in the sector. Meanwhile, the United States Copper Index Fund, the largest copper ETF, has gained 30% year-to-date, attracting $18.5 million in inflows during a two-week period in March.

Technical Analysis

Copper prices are currently testing support at the $4.60 level, with the next significant support zone at $4.45. The metal has been trading in a consolidation pattern since early May, following the sharp decline from the all-time high reached in late March.

The 50-day moving average is providing resistance around the $4.69 level, while the 200-day moving average offers support near $4.52. Momentum indicators suggest the market remains in a neutral position, with potential for movement in either direction depending on upcoming economic data and trade developments.

Market sentiment indicators show mixed signals, with the copper put/call ratio having recently reached extreme levels, suggesting traders were heavily hedging against further declines rather than positioning for a bounce.

Price Outlook

Investment banks maintain divergent but generally positive outlooks for copper:

• Goldman Sachs expects copper prices between $5.00 and $5.50, projecting a deficit of 180,000 tons in 2025 and 250,000 tons in 2026
• JP Morgan forecasts copper at $9,225 per metric ton in the second half of 2025, suggesting a modest 3.2% decline from current levels
• Mercuria forecasts copper prices to rise to >$12,000/t this year
• Commerzbank has raised its copper price target to $5.00
• Bank of America sees copper prices between $4.50 and $5.25

Conclusion

The copper market remains at a critical crossroads, balancing modest supply growth against fluctuating demand pressures.

While the US-China trade truce has provided some temporary relief, persistent concerns about global economic growth and potential policy shifts continue to weigh on sentiment.

As we move through the second quarter of 2025, market participants will be closely monitoring upcoming economic indicators, trade developments, and physical market conditions for further direction.

The tension between structural supply constraints and potentially softening demand will likely continue to drive price action in the near term.

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