Copper price has reached our short term upside correction target around $2.14/pound and has fallen since. Sharp selloff in copper came despite China being closed for the week long New Year holiday. In one of our previous post, available under Metal supply/demand series at EconoTimes, we discussed how companies have restructured themselves, reduced cost and current cash cost for Copper has fallen to $1.4/pound average by mid-2015.

With drop in production cost and continued drive for efficiency we expect copper market to have ample supply in 2016 and fundamental to remain same as prior year. So I would be weakness in demand, to be specific weakness in Chinese economy and global risk aversion, which would drive the copper price.

Technically speaking, since late October last year copper has tested $2.15 resistance area four time at least and latest drop suggest Bears have gained renewed energy as bulls failed once again there and that in the back of weaker Dollar.

In the very immediate term, we expect copper to drop past $2/pound area and drop to as low as $1.95/pound, however that drop might extend and copper could reach our medium term target of $1.75/pound area.

Copper is currently trading at $2.02/pound.