Escondida mine labor deal keeps Copper in consolidation mode

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Copper slides 0.78% today to $6.58

Highlights

The Escondida mine labor agreement has removed immediate copper supply risks, prompting profit-taking as outlooks are reassessed.
US copper inventories now exceed 1 million tonnes with a possible 15% tariff on refined imports affecting future trade flows.
Copper trades below short- and medium-term moving averages with sellers prevailing and bears targeting the $6.4729 to $6.7051 range.

Escondida labor deal and rising US stockpiles drive supply outlook

A labor agreement at the Escondida mine in Chile, the world's largest copper mine, has removed near-term supply risks and influenced recent sentiment, according to Economictimes. This resolution has triggered some profit-taking as market participants reassess supply and demand outlooks. In parallel, US stockpiles have surpassed 1 million tonnes ahead of a possible 15% import tariff on refined copper, a shift highlighted by Pomegra, reflecting the impact of evolving trade policies and inventory management.

Downward momentum persists as sellers dominate under resistance

On the H4 timeframe, the price sits below the MA-20 and MA-50 but remains above the MA-200, signaling downward pressure within a longer-term supportive structure. The Ichimoku Kijun at $6.655 now acts as immediate resistance, while support is found near $6.4729. MACD shows strong selling momentum, ADX is neutral, and RSI is weak at 45.77, indicating sellers have an advantage. CCI, Stoch RSI, and the Awesome Oscillator are neutral, while Bull/Bear Power points to persistent buyer participation, resulting in a divergence of underlying flows.

Bearish bias prevails as downside risk exceeds reversal odds

For the short term, copper is expected to trade within a volatility band between $6.4729 and $6.7051. The likelihood of a move to the upside is low, while downside risks are elevated. Consolidation within this range is the baseline scenario, with a bearish extension favored if price breaks below $6.4729, and a reversal possible only if resistance at $6.655 is overcome.

Viktoras Karapetjanc, lead analyst at Traders Union, sees the recent labor agreement at Escondida as a fundamental relief to global copper supply risk. He notes that the market is now recalibrating, with traders watching US stockpiles and tariff prospects for cues. Macro and sentiment indicators signal a bearish skew in the short term, but long-term fundamentals remain supportive. 'Near-term volatility is elevated, yet the supply story and bullish macro setup keep my bias constructive above $6.4729,' says Karapetjanc.

Previously it was reported that Canada advanced its critical minerals strategy by supporting the acquisition of the Thompson Mine Complex, underscoring the importance of supply chain resilience for key industrial metals. In the current environment, with copper trending below crucial moving averages and facing elevated downside risks despite removed supply threats, traders should stay alert for a potential bearish extension if the price falls beneath $6.4729.

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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