Copper slides nearly 2% as major copper mine expansion approved in Chile

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Copper falls 1.66% to $6.02 today

Highlights

BHP Group secured environmental approval for a major copper capacity expansion in Chile, boosting prospective global supply.
Broader copper prices remain pressured, as new supply expectations outweigh limited incremental demand from AI and ongoing industrial shifts.
Copper faces strong bearish momentum, trades below key moving averages, and is likely to consolidate within a $5.9439–$6.0671 range with downside risk prevailing.

New Chile expansion approval stirs supply expectations, dampening prices

BHP Group has received environmental approval for a major copper project expansion in Chile, according to Bloomberg, a development that permits one of the world’s largest producers to increase mine capacity and prospective output. This regulatory milestone paves the way for additional supply to enter the global copper market, heightening expectations of future availability and weighing on near-term price dynamics. Secondary factors, including ongoing industrial substitution trends and the relatively small contribution of artificial intelligence to copper demand, remain relevant though price action has remained under broader selling pressure.

Downside momentum confirmed as resistance holds and indicators signal weakness

Technically, HG faces resistance at the Ichimoku Kijun level of $6.1401 and is trading below its 20-day ($6.1177) and 50-day ($6.1526) moving averages, while staying just above the 200-day moving average at $5.904. Momentum signals are decisively negative, as Moving Average Convergence Divergence (MACD) and Average Directional Index (ADX) both register a sell setup. The Relative Strength Index (RSI) stands at 36.1, reinforcing a bearish bias, while both the Commodity Channel Index (CCI) and Stochastic RSI indicators signal oversold conditions. Bearish readings from Bull/Bear Power and a downward-trending Awesome Oscillator further confirm prevailing downside momentum.

Consolidation likely as price hovers near key support range

Short term, copper is expected to consolidate within the $5.9439 to $6.0671 range, reflecting typical volatility for the current environment. There is a 76% probability of continued downside and a 24% chance of an upside rebound. A push above $6.1401 would open room for a recovery, while sustained pressure below $5.9439 would indicate risk of further declines.

Anton Kharitonov, analyst at Traders Union, views copper’s outlook as pressured in both technical and fundamental terms. He notes that BHP Group’s project approval adds to supply risk, while key momentum indicators remain strongly bearish. Resistance levels are intact, and sentiment is defensive, with little sign of a reversal. "Unless copper recovers above $6.1401, I expect further downside to prevail in the near term."

Earlier, analysts noted that copper's market strength was supported by ongoing supply-side disruptions and robust long-term demand despite mixed short-term technical signals. The latest regulatory approval for expanded production in Chile introduces a significant shift toward increased supply, spotlighting the risk of continued downward pressure unless copper decisively reclaims the $6.1401 resistance level.

Source of Data: HG Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.