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Copper Falls on Profit Booking as Investors Await Beijing Stimulus Cues

ByKedia Advisory
Published 04-10-2024, 10:10 am
HG
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Copper prices settled down by -0.47% at 852.6, driven by profit booking as investors awaited further cues after recent stimulus measures from Beijing. In September, China introduced policies aimed at supporting economic growth, including rate cuts, liquidity injections, and easing home purchase restrictions. Despite these measures, the market remained cautious, contributing to the price decline. Additionally, copper inventories in Shanghai Futures Exchange (SHFE) warehouses increased to 141,625 tons by September 30, marking the first rise since early July, after 12 consecutive weeks of stockpile reduction as prices corrected from record highs earlier this year.



The global refined copper market displayed a surplus of 91,000 metric tons in July, following a 113,000 metric ton surplus in June, as per the International Copper Study Group (ICSG). For the first seven months of 2024, the market surplus reached 527,000 metric tons, compared to 79,000 metric tons during the same period in 2023. This surplus indicates a well-supplied market, further pressuring prices. In August, China’s unwrought copper imports fell to a 16-month low of 415,000 metric tons, down 12.3% year-on-year, reflecting weaker demand.



Technically, the market saw long liquidation, with open interest decreasing by -0.78% to 8,376 contracts while prices declined by 4. Copper is currently receiving support at 845.4, and a move below this level could test 838.1. On the upside, resistance is expected at 863.7, and a break above could lead to prices testing 874.7. The technical outlook suggests cautious sentiment, with a well-supplied market and weak demand from China weighing on prices.

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