Copper prices fell 0.81% to $799.95 after the union at Chile’s Escondida copper mine came to an agreement with BHP, avoiding the risk of a strike that could have impacted global copper supplies.
However, expectations for U.S. interest rate cuts and indications of improving demand in China. The world’s biggest consumer of copper, helped to somewhat limit the downside.
Due to lower export profitability, China’s July refined copper exports of 70,006 tonnes were much less than June’s record exports of 157,751 tonnes.
With a discount of more than $100 per tonne to the three-month contract. The London Metal Exchange’s (LME) cash copper contract indicated ample supply in the near term.
The demand for physical copper in China has somewhat increased recently. Despite prices falling 3.9% in July and 4.4% in June.
Despite the persistent challenges in the property sector and the nation’s slowing economic growth, a robust revival in consumption seems improbable.
Global Copper Market Sees Surplus Surge in 2024, Says ICSG
The International Copper Study Group (ICSG) reports that the global refined copper market saw a surplus of 65,000 metric tonnes in May. Up from an April surplus of 11,000 metric tonnes.
The market saw a 416,000 metric tonne excess for the first 5 months of 2024 as opposed to 154,000 metric tonnes for the same period the previous year.
From a technical perspective, the copper market is in a long liquidation phase. As open interest dropped to 9,208 contracts from 15.06% as prices dropped by 6.5 rupees.
Copper prices is now supported at 795.6, with further negative aspects potential to 791.3 levels. Resistance is seen at 806.2 on the upside, and an upward move it could take prices as high as 812.5.