Copper prices fell -0.65%, settling at 722.05, due to a number of factors, including concerns about Chinese demand, patchy worldwide manufacturing activity, and anticipation of continued higher US interest rates. Concerns about the direction of the United States Federal Reserve policy and China’s real estate market continue to weigh on the industrial metal’s overall demand.
Copper inventories in warehouses tracked by the Shanghai Futures Exchange increased by 36% to reach their highest level since July, indicating the impact of slowing activity.
The record high of $109 for the LME cash copper discount to the three-month agreement suggests that demand is not strong. In spite of this, stocks in warehouses registered with the LME continued to fall, hitting their lowest point since September. As a result, copper saw some price support.
According to the INE statistics agency, Chile’s copper output in December stayed constant year over year at 495,537 metric tonnes, making it the world’s largest producer. However, due to difficulties in the industrial sector, Chile’s manufacturing output fell by 1.8% over the same time period.
Following the closure of a significant copper mine in Panama, just as smelters were looking to increase output, China, the world’s largest consumer of copper, faced an unexpected shortage of copper concentrate supplies.
Technically, there is more selling pressure on the copper market as shown by the 5.52% rise in open interest, which settled at 4892 while prices fell by -4.7 rupees.
Support for copper is located at 720. And if this level is broken, there could be a test of 717.8 levels. A move above is anticipate resistance at 725.2, and a test of 728.2 could follow.