Copper’s Resilience Amid US Dollar Decline


Copper’s closed up 0.16% at 722.35, buoyed by the declining US dollar as traders and investors remained cautious ahead of key central bank meetings. The Chinese government is considering a set of policies with the goal of raising about $2 trillion to stabilise the collapsing stock market.

In order to improve investor confidence, the Chinese cabinet has pledged to implement more effective measures. Such as increasing the amount of medium- and long-term capital injected into the capital market. Since mid-October 2023, the amount of copper’s stock in warehouses approved by the LME has decreased by 18%, totaling 156,750 tonnes.

Significantly, the percentage of cancelled warrants. Which indicate metal designated for delivery—has increased to 21% from 12% on January 11. This suggests that there may be more copper escaping the LME system.

The dynamics of the global copper market have changed as a result of China’s December increase in imports of copper ore or concentrate from Australia, which lifted an unofficial ban. The global market for refined copper saw a deficit of 119,000 mt in November, up from 48,000 mt in October. According to the International Copper Study Group.

After accounting for variations in inventory in Chinese bonded warehouses. The November shortfall was 128,000 metric tonnes, as opposed to October’s shortfall of 70,000 metric tonnes.

Technically, there appears to be new buying activity in the copper market, as evidenced by the 25.16% rise in open interest to 4248 and the 1.15 rupee price increase.

Support for copper prices is seen at 721.2; a break below there could test levels of 719.9. Resistance is anticipat at 724.5 on the upside, and a break of this mark could trigger additional testing at 726.5.