Copper prices rally across the globe hovering around $5.23 per pound, reflecting an increase of about 30.5% since the beginning of the year. This surge has brought copper close to its all-time highs, driven by a combination of supply constraints, demand expectations, and macroeconomic factors.
Factors Driving the Copper Price Surge
Several key factors are influencing this movement.
U.S. Tariff Threats: President Trump might impose tariffs of up to 25% on copper imports. Global copper inventories are reportedly tight, with some sources indicating that refined copper stocks are equivalent to just a few days of global consumption. This has led U.S. industries to stockpile copper in anticipation of these tariffs, thereby driving up prices. The closure of major mines, such as the Cobre Panama mine, which took about 1% of the world’s supply offline since late 2023 has put extra pressure on the supply side.
Chinese Economic Stimulus: China’s recent economic stimulus have boosted demand for copper to the world’s largest copper consumer, as the metal is essential in various industries, including energy, technology, like electronic vehicles (EV), construction and manufacturing. Analysts expect between 100,000 and 150,000 metric tons of refined copper to arrive in the U.S. soon in anticipation of tariffs or to capitalize on a price premium.
Hedge funds and speculators are positioning for significant price moves, with some anticipating prices could double or quadruple if a new commodity boom takes place.
The recent spike in copper prices, supported by a wave of tight supply, strong industrial demand, and speculative interest. Yet, the copper market remains volatile and sensitive to global economic policy changes. Investors should be very careful as it’s a dynamic situation, with both opportunity and uncertainty in play,
From a technical point of view, the copper price has reached overbought levels (RSI above 73) and a correction from recent highs can’t be ruled out. Strong support for the industrial metal stands at 4.67 the 50-day moving average, while strong resistance awaits at 5.39 the all-time high from yesterday’s trading session.
Chart by TradingView
Nikolas has been involved in the finance industry for over fifteen years spanning across Europe and USA with a depth of knowledge and experience within many aspects of the financial markets. Nikolas gained several years experience with some of the Europe’s leading Brokers, as equity analyst, and trader managing accounts for both Private and Corporate Investors. He enjoys both the fundamental and technical aspects of trading focusing on stock markets and all FX majors. Currently, Nikolas provides analysis and comments to online financial publications. Educational background in Economics (BSc), and Finance (MSc).
