Copper Drops to 3-Month Lows despite China Rate Cuts
Copper Analysis
Surplus widened in the first five month of 2024 compared to a year ago, according to the latest update from the International Copper Study Group (ICSG) [1], casting doubt over the supply-demand dynamics. At the same time, the two main consumption drivers - the AI boom and the clean energy transition – are turning into liabilities. Doubts over the AI proliferation amidst a rotation out of Big Tech and concerns over the green economy in the case of a Republican victory are among the culprits.
Furthermore, strained Sino-Western relations and poor data from China have aggravated worries over the economic recovery of this top copper consumer and producer. The country's central bank moved with barrage of cuts in short and long term rates in order to revitalize economic activity, including the five-year LPR that affects mortgage rates, but markets appeared unimpressed.
Copper prices extend their decline from the May record peak and hit three month lows, as negativity rises. The non-ferrous metal now falls below the 200Days EMA (blue line), bringing the March lows in the spotlight (3,816).
On the other hand, the semiconductor industry that relies heavily on Copper is projected to rebound this year with a 16% growth [2], while the road to net zero seems inescapable, despite hurdles. These forces can keep consumption high, with ICSG expecting a 2.1% increase this year.
On the technical front, the fall is way stretched as the RSI points to the most oversold levels of the year. These conditions can help Copper rebound and try to reclaim the EMA200 (black line). Successful effort would give control back to the bulls, but the upside contains multiple roadblocks.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
References
| Retrieved 23 Jul 2024 https://icsg.org/press-releases/ | |
| Retrieved 16 May 2026 https://www.wsts.org/76/Recent-News-Release |
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