Copper price ended last week in the green; marking five consecutive weeks of gains. However, it has remained range-bound after pulling back from the record high hit earlier in the month.
On the one hand, concerns over the aggressive US tariffs had traders stocking up ahead of the enactment on 1st August. The inventories are seen as sufficient to satisfy demand for the rest of the year. As such, analysts expect copper price to face demand and price headwinds in H2’25.
However, improving Chinese economy and the world’s efforts in achieving the net zero goal on carbon emissions offers support to the red metal.
COMEX copper has been range-bound since rallying to a fresh record high close to two weeks ago. At the time of press, it was at $5.60 a pound as the bulls successfully defended the crucial support at $5.50. With the new week’s economic calendar being relatively light, the asset may remain in consolidation mode.
Copper price headwinds await in H2’25
Since February when President Trump ordered the Secretary of Commerce to conduct a Section 232 investigation on copper imports, traders have been stocking up aggressively from Asia and Europe. According to JP Morgan, the country has imported a year’s worth of copper over the past 6 months. As such, the imposed 50% levies set to take effect from 1st August is expected to disincentivize aggressive copper shipments to the US.
While copper price has held steady above the prior ceiling at $5.37 per pound, Citi sees the recent pullback as the start of a bearish trend, at least for the near term.
In a note to its investors, the bank indicated that the red metal will likely be under pressure in the second half of the year, citing easing demand. More specifically, it forecasts the unwinding of tariff-related inventories to the US as well as lower consumption in China’s renewable energy sector.
By the end of July, the US will have copper stockpiles in excess of around 500kt. This amount is seen to be sufficient to negate the country’s import demand for the remainder of the year. As a result, Citi expects copper price to drop to $8,800 a tonne in the next 3 months.
Despite this bearish forecast, the bank maintains a positive outlook for the medium term. It expects prices to average at $10,000 and $11,000 per tonne in 2025 and 2026 respectively. Transition to green energy and a positive global growth outlook are set to sustain this uptrend.
COMEX copper price technical analysis
Copper price has been range-bound in recent sessions, even as the bulls successfully defended the support at $5.50. On the one hand, it continues to trade above the 20 and 50-day EMAs; signalling the continuation of the uptrend. However, as the market moves towards a balance, there lacks enough bullish momentum to retest the recently hit record-high of $5.89.
In the short term, the range between $5.50 and $5.75 will be worth watching. Below that range’s lower limit, the bears will be eyeing the previously steady resistance level of $5.37. A further decline will render this thesis invalid.
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