Copper prices fell by 0.41%, setting at 714.85, owing to a number of factors influencing the worldwide copper market. Significantly, Copper warehouses under the supervision of Shanghai Futures Exchange (SHFE) saw a 10.8% increase in copper inventories from the prior Friday. Which sparked worries about an excess supply.
This increase, along with the People’s Bank of China’s (PBoC) surprise hold on medium-term facility rates. Illustrates China’s cautious approach to additional stimulus measures in the face of slower-than-expected economic growth.
Concerns about supply are exacerbated by the recent production stoppage at First Quantum’s Cobre mine in Panama and the Anglo-Americans’ 25% reduction of the year’s target copper output due to rising operating costs.
Furthermore, since the start of the year, copper inventories at large Chinese warehouses have increased by 40%. This has resulted in a significant decline in the Yangshan copper premium as producers are reluctant to make large bids.
China’s output of refined copper demonstrated resilience in the face of these difficulties, rising by 16.6% in December over the same month last year to reach 1.17 million metric tonnes. The total amount of refined copper produced in 2023 was around 12.99 million tonnes, a 13.5% increase over 2022.
Technically speaking, the market is in a long liquidation phase as evidenced by the -4.53% decline in open interest that resulted in a settlement of 3776. Copper prices is position with support at 713.5 rupees due to the accompanying price decline of -2.95 rupees.
If this level breaks, it could test 712.1. Expectations for resistance are at 716.3, and if that level is surpassed, it could test 717.7.