COMEX copper futures retreated on Wednesday as the risk premium from earlier supply concerns dissipated. The benchmark contract lost 2.26% to close at $6.4995/lb, breaking below the $6.50 support level intraday before recovering. Trading volumes remained elevated at 1,259 data points, suggesting active position adjustments.
LME three-month copper settled at $13,975/mt with a backwardation of $9/mt versus cash, signaling continued nearby tightness despite the price pullback. LME registered inventories remain near multi-month lows, providing a floor under any further declines.
The trigger for Wednesday's sell-off appears to be profit-taking after copper's 12% rally over the prior three weeks. With no new catalysts from China's stimulus front or US trade policy, speculative longs reduced positions ahead of key economic data releases later this week.
On the supply side, global copper mine output continues to lag. Concentrate treatment charges remain depressed below $10/dmt, indicating insufficient feedstock availability. Smelters in China and India are competing for a limited pool of concentrate, keeping the refined market structurally tight.
Demand from the electrification and AI data center sectors continues to grow at an estimated 6-8% annualized pace. Grid investment alone is projected to consume an additional 500,000 tonnes of copper per year through 2030.
Copper buyers should watch for a test of $6.40/lb support on COMEX. Any further correction below $6.35 would present a strong entry point for covering Q3 requirements. The structural deficit outlook supports locking in medium-term contracts at current levels.