Copper prices are pushing higher again today ahead of the weekend as a combination of supply tightness and a softer US Dollar drive the market north again. Supply concerns have been a key bullish driver this year with dwindling output from largest global producer Chile coming up against a flood of demand from the alternative energy, electric vehicles, and AI sectors alike. Site maintenance, labour strikes, extreme weather events and recent sulphuric acid restrictions from China have combined to weigh on Chilean output which has plunged to record lows this year. Indeed, Chile expects output to remain weak into next year, keeping the price forecast for copper skewed higher as demand from many sectors continues to surge.

USD Weakness

A softer US Dollar is also feeding into better demand for copper here. Recent data weakness in the US has weighed on US rate hike expectations with USD falling accordingly. Liquidity support operations from the US Treasury this week, in the form of increased bond buyback operations, is also depressing USD. While the Dollar remains softer, demand for all commodities is seen higher, further adding to the bullish expectations for copper prices near-term.

Technical Views

Copper

For now, copper prices are once again attempting to break above the 6.5830 level with focus on a retest of the record highs above the 6.8000 handle. Momentum studies are a little softer here suggesting there could be some further ranging activity before we make a fresh break. However, while price holds above the 6.1090 level medium-term, focus remains on a fresh bull phase materialising.

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Written by James Harte

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.