Weekly Update: Time to Buy Copper
Good evening, and welcome to this week’s edition of Stealth Trades!
There is a structural shortage in the copper market driving prices higher. And all signs point to the situation getting worse, not better.
Translation?
The price of copper keeps going up.
Right now, there are about 200,000 tonnes of copper left in the London Metal Exchange warehouse system. That’s the pile the entire world outside of China and America borrows from when it runs short.
Roughly half of that is already spoken for.
Inventories there have fallen for 42 straight trading days. The longest drawdown streak since 2014.
On top of that, the Congo just banned exports of copper concentrate.
And the United States pulled in more than 200,000 tonnes of refined copper in the month of July alone — the biggest month in twelve years.
Right now, copper prices are near all-time highs – setting up in a textbook breakout pattern about to explode even higher. More on that in a minute.
The supply/demand imbalance in the copper market is huge. Every legitimate forecast shows global supply falling short of the rising demand coming from data centers and grid expansions.
Global mine production fell 1.6% over the first five months of this year. Not grew slower. FELL.
And the International Copper Study Group thinks refined production grows a whopping four tenths of one percent for the full year.
And unlike most shortages, the problem cannot be fixed with money. It takes 10-15 years to get a new copper mine up to production. And today’s copper ore is a fraction of the purity we mined 50 years ago.
Add it all up, and you get a market with more buyers than sellers. And when that happens, the result is always the same.
The chart tells the story…
This is what I call a “base-on-base” formation. After a strong run up in late 2025, copper formed a 4-month consolidation pattern before making new all-time highs.
But the summer was brutal for tech stocks. A lot of the big AI names retraced or went nowhere. With proposed data centers being the key contributor to new supply, that same choppy action carried over to copper.
But the smart money kept buying. And it formed another textbook shallowing base.
Nothing is guaranteed. But these base-on-base patterns can deliver outsized moves higher since the available supply has contracted even further.
On Tuesday, I started buying – right there at that arrow when copper pulled back to its 50-day moving average and the lower edge of its trendline.
If the structure holds, this will likely be the last dip before the next surge higher.
I bought futures contracts, but if you want exposure there are other ways to get it.
The simplest is CPER – the United States Copper Index Fund. It is an exchange traded fund that trades just like a stock and can be purchased in any account.
Those who prefer miners should look at the Global X Copper Miners ETF, ticker COPX.
It holds a basket of copper mining stocks and just broke out to new multi-month highs.
Best wishes for your trading,
