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According to a recent report from Bloomberg News on July 12, analysts at TradingCentralSA in London are forecasting that London Metal Exchange (LME) copper futures could drop by an additional 13% over the next two months, potentially reaching their lowest level since 2010. This prediction is based on the formation of a "death cross" in the moving averages, a technical indicator often associated with bearish market trends.
Ludwig Garric, head of commodities research at the firm, warned that LME three-month copper might fall as low as $6,050 per ton. His analysis has proven accurate in the past, including his successful forecast of soaring soybean prices last year.
In an email, Garric explained that the 20-day, 50-day, and 100-day moving averages are all declining, with shorter-term averages now below longer-term ones—a classic sign of a weakening trend. He also noted that the price is being further pressured by a key upward trend line, which is acting as resistance.
He added that the 50-day moving average has been below the 200-day moving average since April 11, and the 100-day average has remained below the 200-day one since April 30, forming a strong bearish crossover signal. This technical setup has historically signaled a prolonged downward movement in prices.
So far this year, copper prices have already dropped by 12%, raising concerns among investors. With China—the world's largest copper consumer—showing signs of economic slowdown, demand for the metal is under pressure. As of 12:46 Singapore time, LME three-month copper was trading at $6,980 per ton, down 0.3% on the day.
Market participants are closely watching how the Chinese economy performs and whether central banks will take action to support global demand. For now, the outlook for copper remains cloudy, with more downside risk expected in the coming weeks.