Copper yesterday settled down by -0.88% at 700.2 as the U.S. dollar firmed and caution prevailed ahead of major central bank meetings that could provide further clues on prospects of global economic growth and metals demand. However, investors expected China's easing of its COVID-19 restrictions would boost global economic growth and metals demand. Investors are bracing for a half-percentage-point rate hike from the Fed this week, a step down from its recent series of three-quarter-point increases. Global miner Anglo American (LON:AAL) Plc on Friday cut its copper production estimate for 2023 because of deteriorating ore grades at its Chilean mines, and trimmed the higher end of its output target for 2022.
Visible copper inventories remain low, with Goldman Sachs (NYSE:GS) predicting a supply deficit in 2023 and prices at $11,000 in a year. China produced 899,600 mt of copper cathode in November, down 0.2% MoM but up 8.9% YoY. The output was 3,700 mt lower than the expectation of 903,300 mt. The output totaled 9.41 million mt from January to November, up 3.37% or 306,500 mt year-on-year. A smelter in east China undertook maintenance ahead of time due to equipment failure and there were six smelters overhauled in November.
Technically market is under long liquidation as the market has witnessed a drop in open interest by -5.13% to settle at 5069 while prices are down -6.2 rupees, now Copper is getting support at 696.7 and below same could see a test of 693.1 levels, and resistance is now likely to be seen at 705.6, a move above could see prices testing 710.9.
Trading Ideas:
# Copper trading range for the day is 693.1-710.9.
# Copper prices fell as the U.S. dollar firmed and caution prevailed ahead of major central bank meetings
# Investors expected China's easing of its COVID-19 restrictions would boost global economic growth and metals demand.
# Visible copper inventories remain low, with Goldman Sachs predicting a supply deficit in 2023 and prices at $11,000 in a year.