COMEX copper futures extended their decline to $6.34/lb as speculative traders reduced exposure amid weakening physical market signals. Managed money net long positions decreased by 8% in the week ending June 19, according to CFTC data, the largest weekly reduction since mid-April. The move aligns with rising LME inventory levels and deteriorating Chinese demand indicators.
The COMEX-LME arbitrage window has narrowed. COMEX copper at $6.34/lb converts to approximately $13,970/mt at the standard conversion, a premium of roughly $440/mt over LME three-month. This spread has attracted metal shipments to the US, which partly explains the LME stock build in Asia.
Technical levels are tightening. Support at $6.20/lb (the June 11 low) is the first line of defense for bulls. A break below that would target $6.05/lb, the 50-day moving average. Resistance sits at $6.50/lb, the 20-day moving average. Trading volumes are below the 30-day average, suggesting the market is waiting for a catalyst.
The next catalyst is the US Section 232 copper tariff decision, expected by late June. A tariff on copper imports would widen the COMEX-LME spread and support COMEX prices. No action would likely narrow the spread and pressure COMEX toward LME parity.
COMEX copper at $6.34/lb with declining speculative interest signals near-term downside risk. The Section 232 tariff decision is the key event risk. For US buyers, fixing Q3 volumes below $6.30/lb offers good value if tariffs materialize. For non-US buyers, the LME-CCOMEX spread favors sourcing from Asia. Wait for the tariff decision before committing large volumes.