Copper prices fell by -1.3% to 781.9, as weak U.S. manufacturing and labour market data reignited fears of a recession, impacting the demand outlook for industrial metals like copper. Concerns about slowing demand in China, the world’s largest copper consumer, added to the bearish sentiment. Australian mining giant BHP downgraded its forecast for China's copper demand due to worries over the country’s sluggish economic recovery. Additionally, China’s manufacturing activity contracted further in August, exacerbating concerns about slowing copper consumption.
Goldman Sachs (NYSE:GS) also lowered its copper price forecast for 2025 to $10,100 per ton, down from a previous estimate of $15,000, reflecting weaker prospects for the metal. Despite this, some positive signals emerged, with the Yangshan premium, an indicator of China's copper import appetite, swinging to $62 per ton after a discount in July. Meanwhile, the global refined copper market posted a 95,000 metric tons surplus in June, compared to 63,000 metric tons in May, according to the International Copper Study Group (ICSG). For the first six months of 2024, the copper market had a 488,000 metric tons surplus, significantly higher than the 115,000 metric tons surplus a year earlier.
On the technical front, copper is under fresh selling pressure, with open interest rising by 5.88% to settle at 12,174 contracts. Copper is finding support at 776.4, and a break below this could test 770.9 levels. On the upside, resistance is expected at 792.2, and a move above that could see prices testing 802.5.