Copper Retreats as Supply Risks Stir Volatility

Key Points

• Copper futures dipped 0.5% to $11,395.50/ton, pulling back from a new intraday peak of $11,529.00.
• Withdrawal orders from LME warehouses in Asia signal tightening supply amid tariff speculation and mine cuts.

Copper prices took a step back in Thursday’s session after hitting a new record, with futures on the London Metal Exchange easing 0.5% to $11,395.50 a metric ton. Earlier in the day, prices surged to an all-time intraday high of $11,529.00, underscoring the market’s unease over tightening global supply and geopolitical trade risks heading into 2026.

Fresh data from the London Metal Exchange pointed to a sudden spike in withdrawal orders from copper warehouses in Asia, a move analysts say reflects mounting fear over short-term availability.

The decline comes amid concerns around U.S. levy announcements set to take place in 2026.

Mixed Signals from Majors: Cuts vs Expansions

The production landscape remains choppy. Earlier this week, Ivanhoe Mines slashed its 2026 outlook for the Kamoa-Kakula copper project in the Democratic Republic of Congo, citing operational challenges. Meanwhile, Glencore also trimmed its 2026 copper production target, compounding investor concerns that tight supply may persist well into next year.

However, Rio Tinto offered some balance, raising its 2025 production guidance for the Oyu Tolgoi mine in Mongolia. The firm attributed the adjustment to faster-than-expected infrastructure upgrades and improved extraction capabilities.

Even so, the broader supply narrative leans fragile, and any positive uptick in output could easily be overshadowed by regulatory headwinds or climate-linked disruptions in key copper-producing regions.

Technical Analysis

Copper has extended its recovery, trading at 5.2602, now testing the upper boundary of a consolidation range that has persisted since September.

Price action has been gradually coiling above the key 5.10 support area, and the recent breakout attempt above the 5.25–5.27 resistance band is encouraging, even though today’s candle shows slight hesitation with a -0.66% decline.

The 5, 10, and 30-day moving averages remain in bullish alignment and continue to slope upward, indicating that the short- to medium-term trend is supportive of further gains.

MACD momentum also supports this view — the MACD line has crossed above the signal line and the histogram is expanding in green territory, pointing to improving bullish momentum.

For bulls, a confirmed daily close above 5.30 would likely trigger a rally toward the 5.50–5.60 zone, with the 5.89 high from July back in play as a longer-term target.

However, if price fails to hold above 5.20, we may see another pullback toward 5.05–5.00, where the 30-day MA should act as dynamic support. Overall, momentum is building, but confirmation above resistance remains key.

Cautious Forecast

If global production cuts persist without further offset from majors, and if the U.S. formalises tariffs in early 2026, copper could attempt another test of the $11,500–$11,600 range in the next few sessions. But failure to break convincingly above that level may result in a retracement toward $10,980.

Watch for further LME warehouse data and tariff headlines to shape short-term volatility.

Learn more about trading Precious Metals on VT Markets.