Copper Set to Begin a New Bull Cycle: What's Driving The Move

Core Insights - The copper market is on the verge of a significant bull run, driven by both technical and fundamental factors, indicating a shift in how copper is priced and perceived [1][2][3] Technical Analysis - Copper is breaking out of a three-year ascending triangle pattern, suggesting the continuation of an upward trend that began in 2020 [3] - A golden cross has formed on the long-term chart, indicating a lasting shift in momentum, with a target price of approximately $7.31 per pound, representing nearly 40% upside potential [4] - The copper market is showing bullish MACD divergences against major equity benchmarks, indicating a potential change in market leadership [8][9] Market Positioning - Open interest in copper futures has surged by 26%, from 179,801 contracts in 2022 to 227,318 in 2025, reflecting increased trader confidence [13] - Managed Money long positions in copper futures have increased by 46%, while short positions have decreased by nearly 60%, indicating a decisive bullish sentiment among professional traders [16] - Retail traders are also aligning with this trend, with long exposure up 24% and shorts down 35%, suggesting a growing optimism in the market [18] ETF Inflows - The Global X Copper Miners ETF has seen $668 million in net inflows over three months, indicating strong institutional interest in copper [21] - The U.S. Copper Index Fund has attracted $134 million in inflows over six months, reflecting a desire for direct exposure to copper [24] - The Sprott Junior Copper Miners ETF has also seen $8 million in inflows, suggesting that confidence in the copper market is spreading to smaller, more speculative investments [28] Supply and Demand Dynamics - The International Energy Agency projects a significant supply-demand imbalance, with global copper demand expected to reach 31.3 million tons by 2030, while supply is only projected at 23.1 million tons, resulting in an 8 million ton deficit [33] - By 2040, demand is projected to hit 34.1 million tons, while supply could drop to 15 million tons, creating a 19 million ton gap [34] - The increasing demand for copper is driven by its essential role in electric vehicles, renewable energy systems, and smart grids, while supply constraints are exacerbated by falling ore grades and regulatory challenges [35][36] Market Implications - A confirmed breakout in copper prices could lead to a re-rating across base metals and mining equities, particularly those linked to electrification and grid infrastructure [38] - Higher copper prices are essential for meeting global renewable energy and electric vehicle targets, as current supply levels are insufficient [39] - Copper is positioned to reclaim its role as an inflation hedge, making it an attractive asset for investors seeking to protect against currency debasement [40] Conclusion - The evidence suggests that copper is entering a long-term, secular bull market driven by real scarcity and demand, positioning it as a cornerstone of future global growth [43][44]