Copper futures faced a turbulent week of trading, testing significant psychological highs before succumbing to a bout of volatility that sent prices back below the $5.80 mark. While the broader narrative of electrification and industrial demand remains intact, the market’s inability to hold the $6.00 level has forced a short-term reassessment of near-term momentum.

Rejection at Resistance: The Technical Picture

The defining moment of the week occurred on Tuesday when copper prices briefly pierced the $6.00 ceiling (peaking near $6.05) before facing a sharp rejection. As seen in the 5-day chart, this triggered a rapid descent on Wednesday, with prices shedding over 20 cents in a single session. The aggressive sell-off suggests that while the long-term bullish trend is strong, the $6.00 level has become a formidable technical barrier where traders are keen to lock in profits. By Friday, the market entered a consolidation phase, stabilizing between $5.75 and $5.80, indicating that buyers are stepping back in to defend these lower levels.

Supply Side Shocks: Codelco and Smelting Data

Fundamental news this week provided a mixed but largely supportive backdrop for the bulls. Reports emerged on Friday that Codelco, the Chilean state-owned mining giant, removed key senior executives following an internal audit. This leadership turmoil at the world’s largest copper producer adds another layer of uncertainty to global supply lines that are already stretched. Furthermore, data released this week indicated that global copper smelting activity has hit its lowest level in nearly a decade. This bottleneck in processing capacity implies that despite the week’s price dip, the physical market remains exceptionally tight, which should limit further downside.

Macro Drivers: Strategic Stockpiles and Demand

The wider economic context continues to be dominated by the “green transition” narrative. Market chatter this week focused on the growing divergence between elevated U.S. inventories—driven by strategic stockpiling ahead of potential trade policy shifts—and a deficit in the rest of the world. While high inventories typically signal bearishness, analysts interpret this specific buildup as a defensive measure by industrial consumers ensuring supply for AI data centers and renewable energy projects. This “strategic hoarding” suggests that the smart money expects prices to rise further in 2026, viewing current dips as accumulation opportunities.

Outlook: Consolidation Before Continuation?

Looking ahead to next week, the primary focus for investors will be whether the $5.70 support level holds firm. If the market can consolidate above this floor, it would confirm that this week’s drop was merely a healthy correction within a larger uptrend. Traders should monitor upcoming manufacturing data from China and further updates from Codelco, as these will likely be the catalysts for the next major move. The medium-term outlook remains constructive; as long as supply constraints persist and the green energy transition accelerates, the path of least resistance for copper appears to be higher. Investors should watch for a re-test of $6.00 as the market digests the recent volatility.