Copper Jumps As Chile Output Hits 20-yr Lows
Copper Spikes on Supply Fears
Despite fresh uncertainty over the US/Iran peace process in response to news of further attacks over the weekend, copper prices are pushing firmly higher on Monday. The futures market is up around 2% currently and looking like a retest of all-time highs is likely in coming sessions. The push higher comes amidst concerns over tightening supply levels after Chile reported its lowest output levels in over 20 years in April. Given its stats as the largest global producer, the news is highly concerning for traders and has seen prices jumping higher accordingly. The market was recently hindered by China’s move to limit exports of sulphuric acid, a key component in the copper production process.
Surge In Demand for Copper
While supply levels continue to shrink the demand outlook is moving in the other direction. The boom in AI technology, electric vehicles and alternative energy plants is keeping demand forecasts elevated near-term. As the world continues to explore AI, there is rising demand for copper to be used in data centres and other infrastructure needed to support the sector. Additionally, the continued shift towards green energy means that demand form the EV sector is likely to continue rising. As such, there is a clear supply bottleneck issue for copper currently, exacerbated by the closure of the Strait of Hormuz which means copper prices are highly likely to breakout to fresh record highs near-term.
Technical Views
Copper
Copper prices are pushing higher again with a fresh test of the 6.5830 level now imminent. Above there, the record highs around 6.7190 will be the next target for bulls. The bullish outlook remains while price holds above the bull trend line and the 6.1090 level medium term.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.