Copper Settled Up Supported by Thin Inventories

Copper yesterday settled up by 0.31% at 756.25 supported by a weaker dollar and thin inventories but worries that central bank rate hikes would curb growth and metal demand capped gains. The Bank of England raised interest rates for the second time in as many months, while the European Central Bank (ECB) was more hawkish than expected. Chilean state-owned Codelco's copper production rose 4.3% year-on-year in December to 164,600 tons and the Collahuasi copper mine – a joint venture by Glencore (LON:GLEN) and Anglo American (LON:AAL) – saw output increase 12.9% to 49,900 tons, the Chilean Copper Commission (Cochilco) reported. 
 
Meanwhile, extraction at BHP's Escondida, the world's largest copper mine, fell 17.6% in December to 86,400 tons. Rising geopolitical tensions surrounding Ukraine have fuelled market anxiety about metals supply, driving a market rally recently, as the United States has threatened to hit commodities powerhouse Russia with economic sanctions. Mining giant Grupo Mexico said that global copper demand will grow 3% in 2022. It added the projection could be impacted by an expected economic slowdown in China due to real estate industry hurdles, the coronavirus Omicron variant, and uncertainty over production growth in Chile and Peru, which together represent about 40% of global supply.  
 
Technically market is under short covering as the market has witnessed a drop in open interest by -0.81% to settled at 3295 while prices up 2.3 rupees, now Copper is getting support at 749.2 and below same could see a test of 741.9 levels, and resistance is now likely to be seen at 761.3, a move above could see prices testing 766.1.  

Trading Ideas:
# Copper trading range for the day is 741.9-766.1.
# Copper prices edged up supported by a weaker dollar and thin inventories
# Mining giant Grupo Mexico said that global copper demand will grow 3% in 2022.
# Codelco, Collahuasi copper mine production up in December – Chile's Cochilco