Copper Prices Under Pressure: Global Market Analysis for May 19, 2025

The copper market is experiencing moderate pressure this morning as traders digest recent trade developments and economic indicators. As of 05:00 UTC, LME copper is trading at $4.6060 per pound ($10,155 per tonne), down 0.23% from the previous close.

Overnight Market Activity

Copper prices edged lower during Asian trading hours, with LME copper opening at $9,519/mt on Friday evening before briefly touching a high of $9,541.5/mt and then pulling back.

This follows a volatile week that saw the metal lose ground on Friday, with COMEX copper closing at $4.5555 per pound, down $0.0890 for the session.

The overnight weakness stems from persistent macro concerns and uncertainty surrounding the US-China trade relationship. Despite the recent 90-day tariff truce announced last week, market participants remain cautious about long-term trade policy implications.

Regional Market Performance

China Market

The Shanghai copper market is experiencing its steepest backwardation in nearly two years, with prompt-month contracts commanding a $150/ton premium over three-month futures.

This signals significant tightness in the physical market. Spot #1 copper cathode in North China traded at a discount on Friday, reflecting some softening in immediate demand.

Chinese copper imports surged to record levels in April, reaching nearly 3 million tonnes of copper concentrate, as smelters sought to secure raw materials amid tight global supply.

This comes despite broader economic concerns in China, where copper usage growth is expected to slow to 0.8% in 2026, down from 2.0% this year.

US Market

The COMEX market has seen significant inventory builds, with stocks reaching an eight-year high of 168,563 tons. This surge in US inventories has crushed the tariff premium that had developed in anticipation of potential import restrictions. Just three weeks ago, the cash premium was nearly $1,600 per metric ton (17% of the LME price), but it has since plummeted to $600 per ton (6%).

European Market

LME stocks have decreased to a one-year low of 179,375 tons, with 40% of the remaining stock awaiting physical load-out. The cash-to-three-month spread has shifted to a $30-per-ton backwardation due to declining stocks, contrasting with the contango seen in US markets.

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 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

Demand Outlook

The International Copper Study Group (ICSG) has 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 the October estimate of 2.7%.

The ICSG also 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.

Market Positioning

Major trading houses have been actively positioning themselves in the physical market. Trafigura was reportedly responsible for approximately 80% of the 20,000+ tons withdrawn from Kaohsiung warehouses on May 2, while Mercuria has been steadily accumulating physical copper since Q1 2025.

“The copper market is heading toward unprecedented tightness,” stated Kostas Bintas, Mercuria’s Head of Metals. “We expect prices could surpass $12,000 per ton if Chinese stimulus accelerates alongside US demand.”

ETF Activity

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.

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 of $5.3702 reached on March 26, 2025.

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.

Analyst Outlooks

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
• Commerzbank has raised its copper price target to $5.00
• Bank of America sees copper prices between $4.50 and $5.25
• Societe Generale projects copper prices between $5.15 and $5.70

Sam Spring, CEO of Kincora Copper, noted that “the market is at a very interesting junction and looking for direction,” highlighting the tension between supply constraints and growing demand that defines the copper outlook in 2025.

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.

Traders will be closely monitoring upcoming economic indicators and trade developments for further direction.