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Copper Dropped As Market In 91,000 Metric Tons Surplus In Jul 2024

ByKedia Advisory
Published 01-10-2024, 10:42 am
HG
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Copper prices settled down by -0.57% at 851.35, pressured by a global surplus in refined copper. The International Copper Study Group (ICSG) reported a 91,000 metric ton surplus in July, following a 113,000 metric ton surplus in June. For the first seven months of 2024, the market surplus reached 527,000 metric tons, a sharp increase from the 79,000 metric ton surplus during the same period last year. Refined copper output in July was 2.35 million metric tons, while consumption stood at 2.26 million metric tons, indicating a continued supply glut.



Adding to the pressure, China's factory activity contracted for the fifth consecutive month, with the services sector also slowing sharply in September. The country's Purchasing Managers' Index (PMI) edged up slightly to 49.8 but remained below the 50-mark, signalling ongoing contraction. Weaker demand in China, the world's largest copper consumer, led to a 12.3% drop in unwrought copper imports in August, reaching a 16-month low of 415,000 metric tons. Despite this, copper concentrate imports were up 3.2% for the first eight months of 2024, signalling some resilience in supply chains.



Technically, the copper market saw long liquidation, with open interest declining by -0.31% to settle at 8,285 contracts. Prices dropped by -4.9 rupees, with support at 842.4. If copper falls below this level, it could test 833.3. On the upside, resistance is expected at 863.7, and a break above this level could lead to prices testing 875.9. The market remains under pressure from both surplus supply and weak demand signals from China.

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