Copper Market Structure: Why Price Strength Persists Despite Soft Demand
📈 Copper at $13,000: Why Old Rules No Longer Apply
The copper market has entered a regime that many traders find challenging to interpret. Physical demand from China appears hesitant, and warehouses are not empty, yet prices continue to push into record territory, recently trading above $13,000 per tonne.
This divergence reflects a structural shift in how copper is being priced.
1️⃣ Execution Over Consumption
Copper is increasingly behaving as an execution-risk asset rather than a traditional industrial commodity.
Today, price is shaped by future execution difficulties, not short-term demand:
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Trade policy and tariff risk
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Supply chain disruptions
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Geopolitical and regulatory uncertainty
Market participants are hedging future availability, which drives price independently of immediate consumption.
2️⃣ The Inventory Illusion
Headline LME stocks near 145 kt may appear comfortable. In reality, a significant portion is already earmarked, in transit, or restricted due to location, brand, or delivery rules.
Trader’s insight:
Scarcity today is defined by deliverability, not total inventory.
On MT5, this can appear as:
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Fragmented liquidity
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Thinner Depth of Market (DOM)
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Strong price moves even when inventories remain flat
3️⃣ Trading Implications on MT5
If you trade Copper (HG) or LME Copper CFDs, adjust your framework:
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Stop waiting for demand spikes: Price strength is driven by policy and execution risk, not short-term consumption.
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Watch for displacement: When price doesn’t fall on negative news, buyers may be securing supply months ahead.
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Price discovery mode: With $13,000 broken, the market lacks historical resistance. Use Fibonacci extensions and psychological round numbers as reference points for targets.
🔍 Conclusion
Copper hasn’t run out — system flexibility has.
Price now reflects future execution risk, not just supply and demand.
Traders should adapt frameworks, manage volatility, and focus on structural insights rather than short-term signals.
If you want to improve your market understanding and trade with logic instead of emotions, feel free to join my MQL5 channel and follow along: https://www.mql5.com/en/channels/learning-forex-gold
⚠️ Disclaimer / Personal Analysis
This is my market analysis.
It is provided for educational purposes only. Always manage your risk accordingly and make your own trading decisions.
