Is copper price making a comeback?

Copper price is set for the third straight week of gains amid a bullish demand outlook and persistent supply fears. Notably, the US-China trade talks slated for Thursday are expected to further fuel the optimism. 

Nonetheless, fear remains the key emotion driving the broader financial markets. As such, the persistent economic uncertainties may limit the red metal’s rallying in the short term.  

Supply-Demand Imbalance Bolsters COMEX Copper Price

Copper price has rallied by about 30% year-to-date as the market deals with supply tightness and a positive demand outlook. On Wednesday, the three-month futures on the London Metal Exchange rallied to a fresh record high at $11,146 a ton after topping the previous record high hit in May 2024 at $11,104 a ton. 

At the same time, COMEX copper price extended its previous gains to trade at a level last recorded in late July when President Trump’s tariff decision had it plunge from its all-time high. Notably, the demand outlook has been boosted by the heightened optimism over a US-China trade deal. 

In the latest thaw to the trade tensions, the US President and his Chinese counterpart Xi Jinping are set to meet on Thursday. Heightened optimism ahead of the highly anticipated meeting has bolstered copper demand; a multi-use industrial metal used as a barometer for the global economic health. 

While fear is still the dominating emotion in the financial markets, the fear & greed index has improved from extreme fear of 25 in the previous week to a near-neutral level of 42. However, the prolonged US government shutdown has curbed copper price upside potential. 

In the FOMC statement, the Federal Reserve noted, “Job gains have slowed this year, and the unemployment rate has edged up but remained low through August…Inflation has moved up since earlier in the year and remains somewhat elevated.” it further noted that economic uncertainties remain high.  

On the supply side, disruptions at major mines has intensified fears of a significant global deficit into the coming year. According to the International Copper Study Group, the global copper supply is expected to record a deficit of 150,000 tons in 2026; a major change from the previous forecast of a 209,000 ton surplus. Besides, Anglo American Plc has warned that copper output from its leading mine will likely be lower than expected in 2026. 

These supply fears, coupled with the soaring usage of the red metal for energy transition and AI data centers, has created an environment for copper price to rebound to the year’s glory.  

COMEX Copper Price Technical Analysis

Copper price chart | Source: TradingView

COMEX copper price pulled back slightly on Thursday after rallying to a three-month high in the previous session. Nonetheless, it is on track to record its third consecutive week of gains amid a bullish demand outlook and heightened supply concerns. 

In the short term, the range between $5.08 and $5.24 will be worth watching as investors eye the highly anticipated trade talks between the US and China. Further optimism may give the bulls an opportunity to retest the upper resistance level of $5.37. 

However, the persistent economic uncertainties will likely curb the rallying at that level. On the lower side, a pullback below the crucial support zone of $5.00 will invalidate this cautiously bullish thesis.