Copper Fell As Fears Of Banking Instability Dented Expectations Of Higher Demand

Copper yesterday settled down by -0.37% at 751.3 s fears of banking instability dented expectations of higher demand from key consumers. Meanwhile, soaring shelter costs drove US core inflation to overshoot expectations and solidified bets of a rate hike from the Federal Reserve next week. Also, industrial production in China missed projections for the first two months of the year, undermining the impact of the country’s reopening on economic activity. Still, tight supplies limited the pullback in copper prices. Mining exports from major producers Peru sank nearly 20% annually in January due to the widespread protests that halted the activity. Also, inventories at the Shanghai Futures Exchange dropped for the second week to their lowest since January.

In China, the biggest consumer, Yangshan copper import premiums have begun to rise, pointing to improving demand. First Quantum Minerals, the operator of the Cobre Panama mine, has resumed operations to normal levels at the mine, gold-focused royalty and streaming company Franco-Nevada Corp said on Wednesday. Franco-Nevada has contributed a total of $1.36 billion to the construction of Cobre Panama and the mine accounted for 18% of the company's revenue in 2021. Copper miner First Quantum owns a 90% interest in the mine through its unit Minera Panama.

Technically market is under long liquidation as the market has witnessed a drop in open interest by -8.64% to settle at 3205 while prices are down -2.8 rupees, now Copper is getting support at 746.9 and below same could see a test of 742.5 levels, and resistance is now likely to be seen at 754.8, a move above could see prices testing 758.3.

Trading Ideas:
# Copper trading range for the day is 742.5-758.3.
# Copper fell as fears of banking instability dented expectations of higher demand
# Industrial production in China missed projections for the first two months of the year, undermining the impact of the reopening on economic activity.
# Inventories at the Shanghai Futures Exchange dropped for the second week to their lowest since January.