Copper trades down after US tariff uncertainty redirects copper supply

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Copper drops 1.03% as inventories rise

Highlights

Copper inventories at the London Metal Exchange surged over 50% in three days, sharply reducing immediate supply concerns.
Uncertainty over US tariffs has redirected copper flows, increasing LME stocks and creating regional supply differences.
Technical indicators show copper remains under bearish pressure, with price expected to consolidate between $6.2627 and $6.5949 and high probability of further downside.

Inventory surge and tariff shifts undermine supply squeeze risk

Copper inventories on the London Metal Exchange surged by more than 50% within three days, sharply easing concerns of a near-term supply squeeze and compressing a key market spread, according to The Northern Miner. This rapid build-up has reduced immediate spot buying pressure and contributed to a less supportive price environment. Additionally, tariff uncertainty in the United States has redirected copper flows, increasing inventory levels at the LME and leading to pronounced regional differences in supply, as noted by Mining. These overlapping factors have shifted the balance of market liquidity and supply dynamics in recent sessions.

Persistent selling as negative momentum meets technical resistance

HG remains below the MA-20 and MA-50 but above the MA-200, with the Ichimoku Kijun resistance set at $6.555. Momentum signals are firmly negative: both MACD and ADX confirm a persistent sell bias, while RSI, Stoch RSI, and CCI suggest further downside without oversold conditions. Bull/Bear Power reflects sellers dominating intraday action, and the Awesome Oscillator is neutral, offering no counter-signal.

Range-bound consolidation likely amid low breakout probability

In the short term, copper is expected to trade between $6.2627 and $6.5949, aligning with current volatility bands. The probability of an upward breakout remains low; any sustained move above $6.555 (the Ichimoku Kijun) would indicate a possible test of resistance and may alter the bias. Conversely, a break below $6.2627 could trigger further acceleration to the downside. The most likely scenario is a period of consolidation within the outlined range.

Viktoras Karapetjanc, expert at Traders Union, views the surge in LME copper inventories as a pivotal macro event that has reset short-term market sentiment. He believes the build-up and shifting regional flows signal a temporary rebalancing in supply, with immediate buying pressure likely to remain subdued. Karapetjanc sees downside risk in the near term but maintains a constructive outlook if copper stabilizes above key technical thresholds. "Current weakness presents opportunities for patient buyers — I view any consolidation around $6.2627 as a strong base for future recovery."

Earlier, analysts noted that copper’s downside risk was elevated due to persistent selling pressure and greater sensitivity to global supply shifts. The recent surge in LME inventories and shifts in regional supply dynamics add a new dimension to that outlook, making supply-driven volatility a key factor to watch as copper consolidates within the current trading range.

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

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