Copper Price Analysis: Why $5.50 Beckons Before the Tariff Verdict
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Key Points:
- Direction and price target: Bearish copper into July. Base case: $5.50/lb on COMEX, roughly 9 -10% below current levels near $6.10 after a partial bounce from the June 25 seven-week low, conditional on the Section 232 tariff update due June 30.
- Fed Chair Kevin Warsh's hawkish FOMC debut pushed the dollar to a 13 month high and accelerated long liquidation from a speculative book built near the May all-time record.
- The tariff arbitrage premium in US-delivered copper stood at approximately $400/tonne ($0.18/lb) in early June. Any outcome short of a clear tariff confirmation on June 30 could compress this spread toward its five-year average of under 1%.
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Copper broke below $6.00 on June 25 for first time in seven weeks. Kevin Warsh’s first FOMC meeting moved the median rate projection higher and put a potential hike back on the table. The metal clawed back to around $6.07 by Friday’s close. Still caught between that seven week low and $6.20 resistance. The Neither level has resolved.