Copper — Why It Could Fall from Here
Published: 7th October 2026
The Situation With Copper
Copper looks set to fall. The supply shortage that drove prices up is easing, demand from China is weak, and the chart suggests the rally is running out of steam. Waiting for confirmation before entering.
Why Copper Could Fall
1. The supply squeeze is fading. For months, physical copper was scarce, which pushed prices up. That scarcity is now easing fast. A key market signal (the gap between today’s price and the three-month price) has collapsed from a five-year high in August to almost nothing by early October. At the same time, warehouse stocks have been rebuilding. In short, the tightness that fuelled the rally is disappearing.
2. Chinese demand is weak. China is the world’s biggest copper buyer, and its economy is not pulling its weight. Infrastructure spending is down, and the property sector, a major copper consumer, is deep in decline, with construction starts down nearly 25% year on year.
3. The macro backdrop is against it. A strong US dollar and high interest rates both weigh on commodities like copper. Both are firmly in place right now.
What Could Go Wrong With The Thesis
There’s still a real chance supply tightens again. A possible strike at Escondida, the world’s largest copper mine, could disrupt output. Warehouse stock earmarked for withdrawal is also high. If supply tightens back up, the rally could hold. This is why we wait for the chart to confirm before committing.
The Chart
Copper looks to be completing the final leg of its upward move, with limited room left to the upside and growing downside risk.
The Trade
Enter the short if price breaks below the recent low of 6.5090
Trade is invalidated if price breaks above the 6.9285 high
Bias: Short, once confirmed
Bottom Line
The fundamentals and the chart both point lower, but the supply picture still carries two-way risk until the strike outcome is known and the market confirms the easing. The disciplined move is to wait for the break below 6.5090 rather than jumping in early.
This is not financial advice. All trades carry risk. Always conduct your own analysis and manage position sizing appropriately.
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