Copper continues to see a lot of noise, but overall, the longer-term fundamental picture remains consistent. Supply will be the issue going forward, for years, more likely than not.
Copper
The copper market has rallied slightly early on Wednesday as we continue to see quite a bit of noise in this market. The copper market remains very close to historically elevated levels, as the biggest mover here is going to be supply. Mining grades are deteriorating around the world, large discoveries are scarce, and capital expenditures have been relatively constrained. The electrification and data center infrastructure play is increasingly expected to drive consumption higher. This is a longer-term story that markets have been trying to price in.
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Tariff uncertainty is also creating a little bit of distortion between U.S. copper pricing and the broader global market. In London, copper recently approached the equivalent of $15,000 per metric ton, with traders positioning around possible U.S. import tariffs.
The technical picture is still very bullish
Now it looks as if we are trying to make a real move to break above the 50-day EMA. If we can, then it's likely that we will start to drive towards the $6.80 level, although it just might be a little bit choppy and noisy.
Pay attention to U.S. and Chinese trade and tariff developments, Chinese industrial demand signals, and the U.S. dollar response to the Federal Reserve interest rate decision later in the day. It's not so much the decision that people will be watching; it will be the statement and press conference.
Ultimately, this is a market that, longer term, has quite a few tailwinds, and I am very bullish on it overall, and have no interest in trying to fight what could be a multi-year trend in this market. The pullback only serves as buying opportunities, as far as I can see at this point.
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