Copper prices continue to struggle amid escalating global trade tensions, with COMEX futures currently trading at $4.17630 per pound, down slightly by 0.03% from yesterdays close.The metal has entered bear market territory, having fallen approximately 20% from its record high of $5.28 per pound reached on March 26.Asian markets saw limited copper trading activity overnight as investors remained cautious following yesterdays continued sell-off.The London Metal Exchange (LME) copper price settled at $8,830.50 on April 4, marking a significant 5.1% daily decline.
Chinese futures markets showed minimal recovery during their overnight session despite speculation about potential stimulus measures from Beijing to counter economic headwinds.Recent Price ActionCopper has experienced a dramatic reversal over the past week:Last week saw coppers worst three-day performance since the 2008 financial crisisCOMEX May futures plunged to $4.478 per pound on April 4, extending lossesThe metal officially entered bear market territory after falling 20% from its March peakTrading volumes have been elevated, with significant liquidation of long positionsCopper in Crisis: Trade War Sends Metal into Bear Market Territory.
(Photo Internet reproduction)Global Market ReactionThe copper sell-off has severely impacted mining equities worldwide:Freeport-McMoRan suffered the steepest decline at 13.8% on April 4Glencore and Antofagasta fell more than 10%Teck Resources tumbled 12%Anglo American declined 8.9%BHP and Rio Tinto dropped 9% and 7% respectivelyDrivers Behind the DeclineTrade War EscalationThe primary catalyst behind coppers collapse has been the rapid escalation in global trade tensions:President Trumps April 2 announcement of reciprocal tariffs triggered a broad market sell-offChina responded with plans for 34% tariffs on all US imports starting April 10Markets fear significant disruption to global supply chains and industrial demandMetals are under significant pressure from dampened sentiment, as the world braces for a possible recession and heightened geopolitical tensions that threaten demand, noted Sabrin Chowdhury, head of commodities at BMI, a Fitch Solutions unit.Recession FearsEconomic concerns have amplified selling pressure:JP Morgan has raised its probability of global recession to 60% if current tariff regimes continueThe US stock market experienced its most volatile trading since the 2020 pandemic crashInvestors are liquidating copper positions amid fears of demand destructionSupply-Demand Balance ShiftingChiles state copper commission Cochilco stated on Monday that base metals, including copper, are likely to have peaked in 2025 as they will be negatively impacted by the trade dynamics between the United States and China.
However, they still project average prices to remain above $4 per pound throughout the year.Producer OutlookDespite market turbulence, major producers remain cautiously optimistic:Ruben Alvarado, CEO of Chiles Codelco, announced on Tuesday that the state-run copper producer aims for the upper end of its production range, targeting 1.39 million metric tons this yearCodelco plans to return to the bond market but is evaluating timing amid current volatilityIvan Arriagada, CEO of Antofagasta, acknowledged trade war risks but highlighted potential offsets from technology sectors: AI and advancements in technology create new demands for copper that we could see balancing any shortfalls in more conventional marketsTechnical AnalysisThe copper market shows significant technical damage on the charts:Support has formed around $4.16 per pound, with stronger support at the $4.14 levelMultiple moving averages have turned downward, confirming the bearish trendResistance levels at $4.20 and $4.25 need to be cleared for any meaningful recoveryCurrent trading pattern suggests possible consolidation in the near termCopper futures are fluctuating between critical price levels This situation increases the likelihood of a consolidation phase, at least in the near term, according to technical analysts.Price ForecastsSeveral institutions have revised their copper price outlooks:Chile is reportedly preparing to lower its official 2025 copper price forecast from $4.25 to between $3.90 and $4.00 per poundCitigroups Max Layton warns copper could fall by another 8-10% in coming weeksGoldman Sachs maintains long-term bullish outlook but acknowledges weaker global GDP and copper demand growth pose a risk of delaying the deficit we expect to see in the market this yearLong-Term OutlookDespite current headwinds, structural factors supporting copper prices remain intact:Supply constraints continue as ore grades decline globallyRenewable energy expansion requires significant copper (solar installations need 5.5 MT per megawatt)AI technology boom could add one million MT to copper demand by 2030The International Energy Forum estimates 194 new copper mines will be needed by 2050 to meet energy transition demandMarket SentimentOverall market sentiment remains cautious, with traders hesitant to establish new positions amid high volatility.
Many analysts recommend staying on the sidelines until the trade situation clarifies and technical patterns show more definitive direction.As one market participant noted, The immediate demand destruction from trade barriers is likely to outweigh any structural supply concerns in the near term, highlighting the current priority of geopolitical factors over fundamental supply-demand dynamics.