Can Copper Reach New Highs?

Globe and Mail

20-05-2025

In an April 22, 2025, Barchart article on the copper market, I concluded:
Watch the COMEX futures and the LME forwards over the coming weeks and months. The forwards indicated that the move to new highs in the futures was tariff-related. Meanwhile, copper's long-term trend remains high, but sustaining a move to new highs will require the futures and forwards to validate the short-term price action. In April 2025, copper's long-term bullish path of least resistance remains higher.
Nearby July COMEX copper futures prices were $4.7905 per pound on April 17, with the three-month LME forwards at the $9,188.50 per ton level. COMEX futures prices were lower since the article, while the LME forwards were higher. As the copper market recovers and digests the high price variance created by tariff-related shipments, the red metal's bullish fundamental case remains intact.
COMEX copper futures have been volatile
We have seen a wide range in copper prices since late March 2025.
The daily chart over the past three months shows that COMEX copper futures for July delivery rose to a record $5.4150 per pound high on March 26. The Trump administration's April 2 ' Liberation Day ' tariff announcement caused the bottom to fall out of the copper market, sending the price to a $4.0740 per pound low on April 7. While copper dropped, the price remained above critical technical support at the $4 per pound level. As the chart shows, copper futures were near the $4.60 level on May 16, 2025.
LME forwards reflect copper demand
The three-month copper price on the London Metals Exchange did not reach a new high in late March 2025.
The monthly LME copper chart for three-month delivery highlights that copper forwards fell short of the May 2024 $11,104.50 per ton all-time high, even though the COMEX futures surpassed the May 2024 peak. LME forwards reached a lower $10,110.49 high in late March 2025, and declined to a $8,105 low in early April.
Copper futures outperformed copper forwards as metal flowed from LME warehouses in Europe and other regions to COMEX warehouses in the United States, as the copper market faced the potential of tariffs. Prices collapsed when the Trump administration excluded copper from the trade barriers, but the logistics of shipping copper and other metals excluded from tariffs is time-consuming.
The COMEX futures outperformance over the LME forwards reflects the underlying global demand for copper and the impact of tariffs on the international copper market.
We have seen COMEX copper inventories increase, while LME stocks have declined over the past months, reflecting the impact of tariffs.
The April 22 Barchart article shows that COMEX warehouse stocks were at the 117,131 ton level on April 10, with LME stocks at 209,425 metric tons. On May 15, 2025, COMEX stocks were 43.9% higher at 168,563 tons, with the LME inventories 11.8% lower at 184,650 tons on May 9, 2025.
Tariffs continue to impact the copper market as metal has flowed from LME to COMEX warehouses over the past months. Meanwhile, the potential of a U.S.-China trade deal could lift copper prices as China is the leading refined copper-consuming country. If the Chinese economy grows, the demand for copper will likely increase.
The long-term trend remains bullish
The long-term trends for COMEX and LME copper remain bullish in May 2025.
The quarterly COMEX futures chart illustrates that the long-term bullish trend remains firmly intact in May 2025
The quarterly three-month LME copper forwards chart shows the same bullish trend of higher lows and higher highs. While the tariffs impact copper prices, creating a divergence between copper futures and forwards, the long-term path of least resistance remains bullish as the global copper market is in deficit.
CPER is the copper ETF product that tracks the futures
Buying copper on price corrections has been optimal during this century as the red metal has continuously recovered to new highs. The fundamental supply-demand deficit increases the odds that the bullish trend will continue.
The most direct routes for risk positions in copper are the futures and futures options on the CME's COMEX division or the LME's forwards and options. The U.S. Copper ETF product (CPER) tracks copper futures prices. At $28.59 per share, CPER had over $165 million in assets under management. CPER trades an average of nearly 124,000 shares daily and charges a 0.88% management fee.
The most recent rally in July COMEX copper futures took the price 22.3% higher from $4.0740 on April 7, 2025, to $4.9825 per pound on April 23, 2025.
Over the same period, the CPER ETF rose 20% from $25.65 to $30.79 per share. While the CPER ETF does an excellent job tracking COMEX copper futures, it can miss highs or lows when the U.S. stock market is closed as copper futures trade around the clock.
We witnessed another in a long series of golden buying opportunities when copper prices fell to the April 7 low and held above their critical technical support level. Technical and fundamental factors favor higher copper prices, but even the most aggressive bull market trends rarely move in straight lines, and copper is no exception. Expect lots of volatility in the copper futures, forwards, and the CPER ETF. High price variance creates many trading opportunities.