Copper slides as Escondida mine strike averted, supply risk reduced

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Copper slides 1.52% to $6.55 today

Highlights

BHP and the supervisors union at the Escondida mine in Chile reached an agreement that avoids a strike and ensures steady copper output.
With major supply disruption averted, attention returns to global copper demand trends, and recent price action has stayed under broad selling pressure.
Copper trades below key moving averages with strong downside momentum, and price is likely to remain in the $6.4743 to $6.6443 range with a high probability of a downward break.

Strike risk removed at Escondida as labor deal caps supply fears

BHP and the supervisors' union at the Escondida mine in Chile have reached an agreement, successfully avoiding a strike at the world's largest copper mine, according to Admis. This deal removes a key risk to global copper supply by ensuring ongoing operations, which is likely to limit any potential for price gains driven by supply fears. With a major disruption averted, market focus shifts back to underlying demand and technical trends, though price action has remained under broader selling pressure.

Downside momentum persists as support holds and indicators oversold

On the h4 timeframe, HG is trading below both the MA-20 and MA-50, reflecting ongoing seller pressure in the short and medium term. However, price is still above the daily MA-200, indicating long-term support is intact, while the Ichimoku Kijun at $6.6574 now serves as immediate resistance. Momentum indicators, including ADX and MACD, both signal a sell, and negative Bull/Bear Power readings confirm the dominance of sellers intraday. RSI, Stoch RSI, and CCI all show oversold conditions, suggesting short-term exhaustion, while the Awesome Oscillator reinforces the prevailing downtrend; all indicators align with current downside momentum.

High risk of downward breakout as range-bound trading expected

Over the next two to three trading days, copper is forecast to trade within the $6.4743–$6.6443 band, a typical volatility range relative to present levels. The probability of a sustained move higher is considered very low, while the likelihood of a downward breakout is rated very high. The baseline expectation is for copper to continue oscillating inside this corridor, with a recovery scenario dependent on a clear break above the $6.6574 resistance zone. Conversely, a bearish acceleration would be triggered if support at $6.4743 is breached.

Viktoras Karapetjanc, Traders Union expert, sees the Escondida labor resolution as a key stabilizer for global copper supply. He believes seller momentum dominates, with technical indicators reinforcing a downside bias in the near term. The market’s outlook remains under pressure, but resilient long-term support suggests potential for recovery should sentiment improve. "Given the absence of supply risk, my bias is moderately optimistic, and I am watching for a sustained break above $6.6574 to signal the next bullish move."

Earlier, analysts noted that the resolution of labor tensions at the Escondida mine had shifted market focus away from supply risks and toward broader technical and demand factors. The current analysis reinforces this view, with downside risks now elevated and $6.4743 emerging as a pivotal support level for traders to monitor in the coming sessions.

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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