Copper futures in the US fell to $4.55 per pound on Thursday, extending their recent volatility and touching a near one-month low, underperforming other base metals as softening global demand clashed with rising domestic and international supply.
Copper pulls back to one-month low
The downturn followed disappointing manufacturing PMI figures from major economies—China, the US, and the Eurozone—all of which remained in contraction territory in April. These indicators reinforced concerns about a slowdown in industrial activity, which in turn clouded the demand outlook for copper, a metal heavily used in construction, power infrastructure, and consumer goods manufacturing.
Adding to the bearish pressure, robust mine output from key producers in South America—particularly Chile and Peru—continued to exceed expectations. The International Copper Study Group (ICSG) recently revised its global copper market forecast, doubling its projected surplus for 2025 to nearly 300,000 tonnes, citing higher-than-expected production and a weaker-than-anticipated rebound in consumption. This growing imbalance weighed heavily on prices, especially as Chinese smelters and traders rushed to offload bullish positions on US copper futures. Many of these long positions had been opened in anticipation of protective tariffs, following President Trump's early-year announcement of an investigation into copper import duties.
Sentiment reversed sharply
However, with no immediate follow-through from the White House and amid a rise in global inventories, sentiment reversed sharply. US copper stockpiles saw a significant uptick as overseas shipments were rerouted to domestic warehouses, with importers seeking to front-load supply ahead of any potential trade disruptions. This surge in inventory only exacerbated oversupply concerns and contributed to the unwinding of speculative bets in futures markets.
On the technical front, copper remains vulnerable to further downside if macroeconomic sentiment deteriorates further or if the Federal Reserve signals a prolonged pause in rate cuts, which would maintain pressure on industrial activity and construction financing. However, analysts note that long-term fundamentals for copper remain constructive, driven by the energy transition and surging demand for electric vehicles, grid upgrades, and renewable infrastructure. Still, near-term headwinds from global demand weakness and oversupply are likely to keep the market under pressure.
