Softer Oil Boosts Copper

Copper prices are rising firmly today with the futures market up around 1.7% through early European trading. The move higher comes amidst the pullback in oil prices today following Trump posting overnight that Iran is seeking a new agreement following his declaration yesterday that the ceasefire was now over. Trump made the statement following a series of tit-for-tat attacks between the two countries which saw the US military hit over 80 Iranian sites yesterday while Iran targeted US military sites in neighbouring countries. Oil prices had spiked firmly higher yesterday as fears around the situation grew. Copper prices were down sharply against this backdrop with the threat of a return to war seen lifting energy price expectations, weighing on global manufacturing and demand forecasts.

Supply Concerns & Tariff Threats

Copper prices have been broadly lower from the YTD highs printed in early June but there are still plenty of factors at play that could support a fresh rise in the metal. Supply concerns linked to sulphuric acid shortages (a key component in the copper refinement process) have been cited in bullish forecasts recently as output levels from the world’s largest producer, Chile, continue to fall. Traders are also awaiting a decision on whether US import tariffs will apply to refined copper products. If tariffs will be applied this is expected to drive price sharply higher near-term.

Technical Views

Copper

Copper prices are now back above the 6.1090 level and with momentum studies turning higher, a fresh test of the 6.2845 level is seen next. If bulls can get back above there, focus will turn to the higher 6.5830 level next. To the downside, 5.8550 will be the deeper support zone to watch.