The price of copper is lower today with the price down -$0.11 to $4.565, but for the month the price rose 14% which represents the largest move since January 2021.
The price of the front contract traded to the highest level since April 2022 today with a high at $4.6945, before rotating to the downside into month end. The low price for April was down at $4.02 on the first trading day of the month.
The high price from 2022 reached $5.0395. Ahead of that high are some swing level highs between $4.817 and $4.888 (see yellow area on the chart above). That area represents the next target on more trend like momentum.
On the downside the old high from early 2023 came in st $4.355. Moving back below that level on the daily chart above would likely disappoint buyers at least from a technical perspective.
Gains are being attributed to:
- Supply risks: Limited growth in mine supply and tight availability of concentrates are constraining production, particularly affecting smelters and refiners in China.
- Increasing demand: There is a rebound in demand in the US and Europe as economies recover, coupled with growing needs from the energy transition sector, including electric vehicles, power grids, and wind turbines.
- Bullish market forecasts: Analysts, including those from major Wall Street banks like Citi and Bank of America, have raised their price targets for copper, predicting significant increases through the end of the year and beyond.
- Economic role: Copper is seen as a proxy for economic health, and its critical role in the energy transition highlights its importance.
- Speculative investment: Expectations of a cyclical recovery could drive prices significantly higher, with analysts suggesting potential explosive price increases if certain economic conditions are met.
- Market dynamics: While there is optimism about high prices, there is also caution that high prices may lead to demand adjustments and potential substitution if copper becomes too expensive relative to other metals like aluminum