Copper Prices Slide 0.37% on Monetary Policy Speculation and Dollar Strength


Copper prices fell -0.37% to 757.7 on expectations of looser monetary policy and a stronger dollar, lowering investor sentiment towards the industrial metal. Copper prices were also pushed lower by growing stocks in LME warehouses. Which rose to their highest points since February.

The growing discount of the LME cash copper contract to the three-month contract highlighted concerns regarding a short-term oversupply. Which is the biggest since at least 1982. SHFE warehouse inventories slightly decreased, but copper stocks stayed high due to strong Chinese imports and production.

Although Chinese refineries kept up their March production levels, the recovery in consumption has been sluggish, suggesting that the build-up of inventories may be slowing down. The focus now shifts to how quickly Chinese smelters complete maintenance tasks in the 2nd quarter, as this could have an effect on supply dynamics.

However, according to the ICSG, the global refined copper market saw a surplus of 84,000 metric tonnes in January as opposed to a surplus of 27,000 metric tonnes in December, suggesting continued difficulties in maintaining a balance between supply and demand in the futures market.

Technically, the copper market saw long liquidation, as prices fell by -2.8 rupees and open interest dropped by -3.54% to close at 4438. Copper prices is currently finding support at 755.5, and a break below this level could see it test 753.3 levels. Resistance is anticipate at 760.6, and a move above this level could see copper move towards 763.5.