Copper prices saw a slight decrease of -0.05%, ultimately settling at 729.5, due to positive developments in China’s economic policy support. With the announcement of a significant reduction in bank reserves. China’s central bank sent a strong signal of support for the nation’s fragile economy by pumping approximately $140 billion into the banking system.
Furthermore, sources stated that the Chinese government intended to raise about 2 trillion yuan for a stabilisation fund that would be used to buy shares through the Hong Kong exchange link.
Notwithstanding the encouraging developments in China. Worries about the decelerating growth in nonferrous metal physical consumption as well as conflicting global macroeconomic statistics restrained additional price increases.
In November, there was a 119,000 metric tonnes global refined copper market deficit. According to the International Copper Study Group (ICSG), up from a 48,000 metric tonnes deficit in October. In November, there were 2.26 million metric tonnes of refined copper produced worldwide. Compared to 2.38 million metric tonnes of consumption.
The ICSG noted that there was a 128,000 metric tonnes deficit in November. That increased from a 70,000 metric tonnes deficit in October. When inventory changes in Chinese bonded warehouses were taken into account.
Technically speaking, the copper market displayed long liquidation symptoms. As evidenced by a 1.6% decline in open interest that settled at 4544.
Although copper prices have dropped by -0.4 rupees, support is located at 727.9. And a breach of this level may result in a test of 726.2. Resistance is seen at 731.9 on the upside, and a break through could push prices as high as 734.2.