Copper yesterday settled down by -1.4% at 779.6 as the higher-than-expected inflation rate in the United States sparked fears of monetary tightening, potentially restricting liquidity into commodities.
Workers’ strike threats at BHP Group’s Escondida and Spence copper mines loomed after contract negotiations stalled, putting further pressure on an already tight copper concentrate market.
Prices have also been supported in recent sessions by the hope that copper demand will be boosted by the renewable energy and electric vehicle sectors, as well as by a global economic recovery from the impacts of the pandemic.
Yangshan copper premium, however, hovered around its lowest since February 2016 of $38.50 a tonne, as Chinese demand for imported metal weakened amid elevated commodities prices. Chinese smelter Tongling Nonferrous Metals Group’s output this year will be down by 40,000 tonnes due to maintenance at its Jinlong plant.
The global copper market should see a surplus of 79,000 tonnes this year and of 109,000 tonnes in 2022, the International Copper Study Group (ICSG) said. The global world refined copper market showed a 28,000 tonnes surplus in January, compared with a 1,000 tonnes deficit in December, the International Copper Study Group (ICSG) said in its latest monthly bulletin.
Technically market is under long liquidation as the market has witnessed a drop in open interest by -5.85% to settled at 3543 while prices down -11.05 rupees, now Copper is getting support at 772.1 and below same could see a test of 764.4 levels, and resistance is now likely to be seen at 787.5, a move above could see prices testing 795.2.
Trading Ideas:
- Copper trading range for the day is 764.4-795.2.
- Copper prices fell as the higher-than-expected inflation rate in the United States sparked fears of monetary tightening, potentially restricting liquidity into commodities.
- Workers’ strike threats at BHP Group’s Escondida and Spence copper mines loomed after contract negotiations stalled, putting further pressure on supply.
- Prices have also been supported by hope that copper demand will be boosted by the renewable energy and electric vehicle sectors
Source: in.investing
