Glencore share price analysis as the copper surge gains steam

Glencore (LON: GLEN) share price has bounced back in the past few weeks, helped by the rising copper demand. The stock peaked at 425.60p on Friday, 16% above the lowest level this month. It is hovering at its highest point since February 2nd.

Copper price is soaring

Glencore is one of the biggest mining companies in the world. It has a big stake in the copper industry. It sources its copper from the DRC, Australia, and South America. It is also a leading copper recycler and refiner.

Therefore, in most cases, Glencore tends to do well when the price of copper is soaring. Copper price surged hard this week, hitting its highest point in eleven months. It is trading at $9,000 per ton and has jumped by over 16% from its lowest level in 2023. 

Copper, often seen as a barometer for the world economy, is rising as concerns about supplies rise. It is also jumping as investors start to position for the next phase of global growth. 

Recent economic numbers showed that manufacturing and industrial production in key countries like China and the US remained under pressure. But most analysts believe that the situation is bottoming.

The biggest copper catalyst is that demand is expected to remain at an elevated level as countries modernise their grids. For example, the US is implementing a $20 billion grid upgrade as part of the Inflation Reduction Act. 

The same trend is happening in Europe, where over 25,000 kilometres of new lines are expected to come online in the next two years. Copper is widely used in manufacturing electricity cables.

Glencore makes a lot of money in the copper business. The most recent results showed that its metals and minerals business brought in $7.2 billion in EBITDA in 2023.

Glencore share price has also done well because of other minerals business. Nickel and lithium prices have jumped recently. This is a big deal because the company hopes to become a leading metals giant after spinning off its coal business.

Glencore share price forecast

GLEN chart by TradingView

My last Glencore stock price forecast was correct. In it, I warned that the stock would have a deep dive, citing the rising wedge pattern that was forming. It dropped to a multi-month low of 365.85p earlier this month. 

Now, the stock has bounced back and retested the crucial resistance at 420p, the lowest level on November 10th last year. The 50-day and 25-day moving averages have formed a bullish crossover pattern while the RSI is nearing the overbought level.

Therefore, the stock will likely continue rising as buyers target the key psychological level at 450p.