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Copper Inventories Plunging
Copper prices are soaring on Thursday, bolstered by a broad improvement in risk sentiment, a weaker US Dollar and falling global copper inventories. News of Trump’s investigation in copper imports has seen a flood of copper being rushed into the US ahead of expected tariffs. Industry data shows around 400 kilotons has been brought in since February, far above typical levels, putting a strain on inventories in other countries. On the LME, copper inventories have plunged by more than 60% over the year so far, reflecting the impact of the shift from US importers.
Risk Tone Improving on Israel-Iran Ceasefire
On the risk front, commodities have turned broadly higher this week as a result of the sharp shift in the outlook on the Israel-Iran war. Unexpected news on Monday that Trump had brokered a ceasefire between the two sides saw a reversal of the weak tone with which commodities prices started the week. With the ceasefire continuing to hold for now, copper prices look set to gain further as risk assets continue to improve.
Weak USD Boosting Copper
A sharp drop in USD is also helping feeding into better copper demand here. Further pressure from Trump on the Fed as well as sign of a growing dovish shift among policymakers has seen the Dollar Index breaking down to fresh lows for the year this week. Incoming US data today will now be on watch with any fresh weakness likely to further weigh on USD, keeping copper price supported ahead of the weekend.
Technical Views
Copper
The market is now rising firmly above the 4.8010 level once again and with momentum studies pushing higher, focus is on a test of the 5.1985 level next. Only a break back below the 4.8010 level will alleviate the bullish view, turning focus to 4.5785 instead. For now, though, the focus remains firmly bullish.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.