Copper Gains: Foremost is the anticipation of Chinese economic policy support. Coupled with concerns over supply disruptions due to shipping issues in the Red Sea. The recent uptick in copper prices, with a marginal increase of 0.01% settling at 732.65, can be attributed to several factors.
The International Copper Study Group (ICSG) reported a refined copper market deficit of 53,000 metric tons in October. A slight improvement from September’s 56,000 metric tons deficit.
In October, global refined copper output stood at 2.34 million metric tons, while consumption reached 2.39 million metric tons. Adjusted for inventory changes in Chinese bonded warehouses, there was a 52,000 metric tons deficit.
Supply challenges have further fueled the price surge. The Cobre Panama mine suspension, accounting for 1.5% of the world’s copper supply, stems from disputes with the Panamanian government.
Concurrently, strikes at the Las Bambas mine in Peru. And potential activity suspensions in BHP’s Chilean mines have contributed to the tightening supply. These short-term disruptions coincide with growing concerns that global copper output may struggle to meet the rising demand for the metal in carbon-free technologies. Prompting key funds to increase long positions.
From a technical standpoint, the market shows signs of fresh buying. Evidenced by a 0.82% increase in open interest to 5034. Prices have risen by 0.1 rupees. Support for copper is evident at 731.3, with a potential test of 729.9 if this level is breached. On the upside, resistance is likely at 734.7, and a move above could lead to a testing of 736.7.
Copper Gains–METALS-Most base metals rise on China data, weak dollar
Recasts, adds China industrial profits, updates prices as of 0357 GMT
BEIJING, Dec 27 (Reuters) – Prices of most base metals rose on Wednesday after data showed manufacturing activity in top consumer China improved last month, while a weak U.S. dollar also lent support to the market.
Three-month copper on the London Metal Exchange CMCU3 gained 0.5% to $8,615 per metric ton by 0357 GMT as trade resumed after the Christmas break.
The most-traded February copper contract on the Shanghai Futures Exchange SCFcv1 edged up 0.1% to 69,240 yuan ($9,685.54) per ton.
China’s November industrial profits posted double-digit gains as overall manufacturing improved, further supporting investors’ optimism about copper on energy transition-led demand and tightened supply outlook amid recent mine closures.
However, near-term price gains might be limited by lacklustre spot demand, analysts at Guotai Junan Futures said in a note.
Spot demand in China was subdued after a burst of restocking seen recently, reversing premiums to discounts of 110 yuan per ton on Tuesday SMM-CU-PND.
The dollar index =USDedged higher, but held close to a five-month low. The dollar was poised for its worst performance since 2020 as rising expectations of rate cuts from the Federal Reserve dented the appeal of the U.S. currency.
A weaker dollar makes it cheaper to buy the greenback-priced metal.
Supply-side risks, including bauxite shipment from Guinea and after a fatal accident, also weighed on metals prices.
LME aluminium CMAL3 shed 0.4% at $2,317 a ton, while zinc CMZN3 was up 0.2% to $2,606.50, lead CMPB3 climbed 0.6% to $2,075.50, nickel CMNI3 added 0.8% at $16,640, and tin CMSN3 rose 2.3% to $25,435.
SHFE aluminium SAFcv1 increased 0.6% to 19,300 yuan a ton, tin SSNcv1 rose 2.3% to 213,000 yuan, lead SPBcv1 ticked up 0.4% to 15,790 yuan, while zinc SZNcv1 slipped 0.2% to 21,365 yuan and nickel SNIcv1 was down 1% to 129,190 yuan.
Live: Alumina prices hit record highs, copper reaches 4-month peak | Commodities Corner
Alumina prices hit record highs; Gained 7% on Friday to $446/tonne. Copper at 4 mth high on firm physical demand. Mine supply issues in Latin America. Catch Manisha Gupta in conversation with Nishant Kumar, Technical Analyst, N K Charts.
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