Copper Market Commentary - Monday, April 22

Copper Rally Continues

Copper prices are seen breaking out to their highest level since June 2022 today as geopolitical uncertainty creates growing supply risks. News of fresh UK/US sanctions on Rusisan metals suppliers is stoking fears that an already-tight market will be further choked of supply. Copper futures are currently trading around 24% higher on the year, shrugging off the impact of a stronger US Dollar as traders focus on tight supply. Indeed, the latest COT data shows that copper long positions have been built up to fresh record highs in recent weeks, now the equivalent of more than two millions tonnes on the LME.

 

Mixed Opinions Over Copper Rally

The recent rally is drawing a great deal of attention among market players and provoking mixed opinions. In a note issued last week, Citi is now calling for Copper to embark on its second big bull market of the current century. Meanwhile, BMO said in a note on Friday that it worries the recent rally has become detached from fundamentals meaning without a quick uptick in demand, the current move might prove unsustainable.

 

Data on Watch

Looking ahead this week, a slew of manufacturing data out of the UK, US and eurozone will be closely watched by copper traders as will the latest US GDP data. Any uptick in these readings will no doubt feed into higher demand expectations, pushing copper higher for now.

 

Technical Views

 

Copper

The rally in copper prices has seen the market pushing above the bull channel highs with price now very close to a test of the 4.5785 level. This is a key resistance level with a break above here seen opening the way to a fresh leg higher. To the downside, any correction lower should find support into 4.2975 for now. 


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