Copper recovers to $6.60 a pound after five-week low ahead of Fed and China data

Spot copper traded around $6.60 a pound, about $14,540 a metric ton, on Tuesday, Oct. 27, after a five-week low of $6.44 on Thursday, Oct. 22, and a rebound on Friday.

The Federal Reserve decision on Wednesday, U.S. inflation data on Thursday and China's purchasing managers indexes on Saturday will test whether the rebound holds.

1. Where copper stands

Copper opened the week of Oct. 19 near $6.62 and held between $6.56 and $6.63 through Tuesday. It slipped to $6.52 on Wednesday and hit $6.44 on Thursday as a spike in oil prices and a sell-off in technology shares pulled industrial metals lower.

Reuters reported the three-month London Metal Exchange contract at about $14,085 a metric ton that day, its lowest in more than five weeks. Friday brought a 1.8% rebound to about $14,330 as equities steadied, and spot closed the week near $6.53, down about 1.3%.

Monday, Oct. 26, closed around $6.55. Tuesday reached $6.60 with a high of $6.61, leaving the metal inside last week's range and about 0.3% below where that week started.

An application that prices copper cable, scrap or futures spreads can follow moves like these with a copper price API that refreshes every 15 seconds.

2. Catalysts this week

2.1 Federal Open Market Committee decision, Wednesday, Oct. 28

Rate markets have priced a strong chance of a December hike since the oil spike. For copper the channel is the dollar and risk appetite: a Fed that looks through energy prices would weaken the dollar and support metals priced in it, while a hawkish statement would keep the pressure on.

2.2 U.S. PCE inflation, Thursday, Oct. 29

The personal consumption expenditures price index, the Fed's preferred inflation gauge, is due the morning after the decision. A hot reading would support the hawkish case and would likely revive the selling that produced Thursday's low.

2.3 China PMIs, Saturday, Oct. 31

China's official manufacturing and services PMIs are the most copper-specific data of the week. Downstream operating rates improved after the holiday and inventories in major regions kept falling as of Oct. 22, but high prices, firm premiums and a steep backwardation have kept fabricators from restocking.

A manufacturing PMI above 50 would support demand expectations more than anything in the Fed statement.

2.4 LME inventories and the tariff question

LME stocks rose for three straight days last week to about 273,000 metric tons from 234,000, with most of the increase in New Orleans. About 62% of all LME copper now sits in the United States.

The Comex premium over LME, which peaked near $3,000 a metric ton earlier this year, has fallen to a few hundred dollars and briefly turned negative. Washington is still weighing a tariff on refined copper, proposed at 15% from 2027 and 30% from 2028, with no decision made.

2.5 Supply headlines

The end of a strike at the Centinela mine in Chile removed a supply concern last week. A new disruption at a major South American or Indonesian operation would be the quickest route to a break above last week's high.

3. Levels to watch

• Support: Thursday's low at $6.44 a pound, about $14,200 a metric ton, is the level to defend. Below it, $6.30 is the next area where buyers appeared in September.

• Resistance: Last week's high near $6.63 is the first hurdle, followed by the mid-October high around $6.72. A close above that would return the market to the $7.00 area that analysts have targeted for year-end.

Shanghai Metals Market expects LME copper to trade between $14,000 and $14,450 a metric ton this week, about $6.35 to $6.55 a pound. Tuesday's $6.60 is already above the top of that range.

4. Scenarios for the week

Higher: $6.72 retest

A Fed that plays down the oil shock, a soft PCE reading and a Chinese manufacturing PMI above 50 would let copper clear $6.63 and retest $6.72. Falling Chinese inventories and steady fabrication demand support this case.

Lower: test of $6.30

A hawkish Fed, a hot PCE reading and another decline in technology shares would revive the liquidity selling that produced Thursday's low. With LME stocks still building outside China, $6.44 would give way and $6.30 would come into play.

Base case: range-bound

Metal Sentinel's base case is a week inside $6.44 to $6.63, with the macro events pulling in different directions and the inventory build capping rallies. Direction waits for the China data on Saturday.

5. Last week by the numbers

6. What to watch

Copper dipped with other assets in the liquidity scare and recovered first. The inventory build outside China and the unresolved tariff question limit the upside, while falling Chinese stocks and steady fabrication demand limit the downside.

Metal Sentinel's copper price API publishes live spot copper per pound in more than 180 currencies. For the precious metals side of the same week, see the gold market recap for Oct. 19-23.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always perform your own due diligence before investing in industrial metals.