Copper prices fell -0.84% yesterday, settling at 715.95, on worries about Chinese demand, uneven global manufacturing activity, and expectations of sustained higher US interest rates. The negative perception of copper was influenced by enduring concerns about China’s real estate market and doubts about the direction of Federal Reserve policy.
Copper inventories in warehouses tracked by the Shanghai Futures Exchange increased by 36% to their highest level since July, indicating concern about demand. The three-month contract’s discount to LME cash copper also reached a record high of $109, a sign of weak demand dynamics.
The general mood remained negative even with a little boost from falling copper stocks in LME-registered the warehouses to their lowest point since September.
According to the INE statistics agency, December’s output in Chile. The world’s largest copper producer, was 495,537 metric tonnes, unchanged from the previous year. However, INE reports that Chile’s manufacturing output fell by 1.8% in the same time frame.
Following the closure of a significant copper mine in Panama. China’s Nonferrous Metals Industry Association (CNIA) suggested copper smelters to reduce output and delay new projects due to tightening raw material supplies.
From a technical perspective, the copper market is showing signs of new selling pressure as open interest increased by 6.44% to settle at 5,207.
The current level of support for copper prices is 713.2; a breach below this level may result in a test of 710.4.
Resistance is anticipat at 720.7 on the upside, and a move above there could test 725.4.