Copper inventories have increased for 12 consecutive months, "stockpiling" in New Orleans, while LME copper is desperately defending the last stronghold of 12,480: has the countdown to a breakout begun?
2026-02-18 19:44:13
On Wednesday (February 18), copper prices on the London Metal Exchange (LME) rose by about 1% in quiet trading, rebounding from a more than one-week low hit in the previous session. Trading was subdued as most traders from China, the world's largest metal consumer, were absent from the market due to the ongoing Chinese Lunar New Year holiday. Against this backdrop, bargain hunters emerged, providing support for copper prices.
Looking back at recent trends, LME copper prices entered a correction phase after hitting a record high of $14,527.50 per ton on January 29th. To date, the cumulative decline has approached 12%. This adjustment has been accompanied by a continuous rise in LME registered warehouse inventories. Data shows that LME copper inventories have increased for the twelfth consecutive day, reaching 224,600 tons, a new high in 11 months. Notably, warehouses in New Orleans, USA, have recently seen a continuous influx of copper, bringing the proportion of copper inventories in US warehouses to nearly 18% of total LME inventories. This signal of ample supply in the physical market, contrasting with high prices, has prompted cautious reflection in the market. Some analysts point out that the simultaneous rise in inventories and prices is unusual, especially given the backdrop of declining copper consumption in the US over the past year.
In the spot market, the discount of LME spot copper contracts to three-month copper futures remained around $100 per ton. This price difference structure indicates that there is no urgent demand for metals in the short term, further confirming the relatively loose physical supply. A well-known institution believes that the key variable in the future market trend may lie in the strategic stockpiling behavior of major economies. If the plans proposed by the United States and China to establish strategic copper reserves are implemented, it could significantly reduce commercial inventories, thereby providing upward space for prices and potentially reversing the current price pressure caused by inventory accumulation.
From a technical chart perspective, the daily candlestick chart for LME copper around January 30th showed a "lightning rod" pattern with a long upper shadow, accompanied by significant price volatility. This clearly indicated heavy selling pressure at the time, a technical signal of a potential market top. Subsequently, prices fluctuated downwards, recently hovering between $12,400 and $12,800 per ton. The narrowing candlestick bodies suggest a weakening of downward momentum and signs of market stabilization.
The current price is trading in a weak zone between the lower and middle Bollinger Bands. After a period of expansion, the Bollinger Bands are gradually narrowing, suggesting that the one-sided downtrend may be coming to a temporary end, market volatility is decreasing, and a new directional move is brewing. Regarding the moving average system, the price has broken below the 50-period moving average, and both short-term and 50-period moving averages are diverging downwards, clearly indicating a weakening medium-term trend. As for the MACD indicator, the DIFF and DEA lines are both below the zero line, indicating that the market is still dominated by bearish forces; however, the MACD histogram (negative bars) is continuously narrowing, showing that the downward momentum is weakening and a technical correction is accumulating, but a clear golden cross reversal signal has not yet formed.
In summary, LME copper prices are currently in a critical tug-of-war between bulls and bears. The first support level to watch is around $12,480 per ton, which is where the lower Bollinger Band is located; if this level is broken, stronger support lies at the previous low cluster around $12,400 per ton. The first resistance level for any rebound is at $12,900 per ton, a confluence of resistance formed by the middle Bollinger Band and the 50-period moving average; a successful break above this level could target the upper Bollinger Band area around $13,300 per ton.
Looking ahead, the short-term trend of LME copper prices is expected to continue to revolve around inventory changes, the pace of consumption recovery, and macroeconomic sentiment. Before Chinese traders fully return to the market after their holidays, the thin trading pattern is likely to persist, and price volatility may remain at current levels. Continued inventory increases are putting downward pressure on prices, but substantial progress in external factors such as potential US stockpiling programs could inject new upward momentum into the market. Technically, the low-level consolidation and the need for indicator correction suggest that the market is searching for a new equilibrium, and future directional choices will depend on clearer guidance from more key variables.
Looking back at recent trends, LME copper prices entered a correction phase after hitting a record high of $14,527.50 per ton on January 29th. To date, the cumulative decline has approached 12%. This adjustment has been accompanied by a continuous rise in LME registered warehouse inventories. Data shows that LME copper inventories have increased for the twelfth consecutive day, reaching 224,600 tons, a new high in 11 months. Notably, warehouses in New Orleans, USA, have recently seen a continuous influx of copper, bringing the proportion of copper inventories in US warehouses to nearly 18% of total LME inventories. This signal of ample supply in the physical market, contrasting with high prices, has prompted cautious reflection in the market. Some analysts point out that the simultaneous rise in inventories and prices is unusual, especially given the backdrop of declining copper consumption in the US over the past year.
In the spot market, the discount of LME spot copper contracts to three-month copper futures remained around $100 per ton. This price difference structure indicates that there is no urgent demand for metals in the short term, further confirming the relatively loose physical supply. A well-known institution believes that the key variable in the future market trend may lie in the strategic stockpiling behavior of major economies. If the plans proposed by the United States and China to establish strategic copper reserves are implemented, it could significantly reduce commercial inventories, thereby providing upward space for prices and potentially reversing the current price pressure caused by inventory accumulation.
From a technical chart perspective, the daily candlestick chart for LME copper around January 30th showed a "lightning rod" pattern with a long upper shadow, accompanied by significant price volatility. This clearly indicated heavy selling pressure at the time, a technical signal of a potential market top. Subsequently, prices fluctuated downwards, recently hovering between $12,400 and $12,800 per ton. The narrowing candlestick bodies suggest a weakening of downward momentum and signs of market stabilization.
The current price is trading in a weak zone between the lower and middle Bollinger Bands. After a period of expansion, the Bollinger Bands are gradually narrowing, suggesting that the one-sided downtrend may be coming to a temporary end, market volatility is decreasing, and a new directional move is brewing. Regarding the moving average system, the price has broken below the 50-period moving average, and both short-term and 50-period moving averages are diverging downwards, clearly indicating a weakening medium-term trend. As for the MACD indicator, the DIFF and DEA lines are both below the zero line, indicating that the market is still dominated by bearish forces; however, the MACD histogram (negative bars) is continuously narrowing, showing that the downward momentum is weakening and a technical correction is accumulating, but a clear golden cross reversal signal has not yet formed.
In summary, LME copper prices are currently in a critical tug-of-war between bulls and bears. The first support level to watch is around $12,480 per ton, which is where the lower Bollinger Band is located; if this level is broken, stronger support lies at the previous low cluster around $12,400 per ton. The first resistance level for any rebound is at $12,900 per ton, a confluence of resistance formed by the middle Bollinger Band and the 50-period moving average; a successful break above this level could target the upper Bollinger Band area around $13,300 per ton.
Looking ahead, the short-term trend of LME copper prices is expected to continue to revolve around inventory changes, the pace of consumption recovery, and macroeconomic sentiment. Before Chinese traders fully return to the market after their holidays, the thin trading pattern is likely to persist, and price volatility may remain at current levels. Continued inventory increases are putting downward pressure on prices, but substantial progress in external factors such as potential US stockpiling programs could inject new upward momentum into the market. Technically, the low-level consolidation and the need for indicator correction suggest that the market is searching for a new equilibrium, and future directional choices will depend on clearer guidance from more key variables.
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