Copper prices fell by -2.04% to settle at 849.9, influenced by a notable rise in LME inventories, which have surged around 50% since mid-May, and record-high copper exports from China. Additionally, rumors of reduced processing fees due to a potential ore shortage have surfaced, with negotiations between a Chilean copper mine operator and Chinese smelters. In an effort to mitigate the scarcity of copper ore, China's imports of copper scrap have increased significantly. China's monetary policy remains supportive, with the central bank governor indicating flexible use of tools such as interest rates and reserve requirement ratios.
Despite this, China's key benchmark lending rates remain unchanged, reflecting limited monetary easing amid narrowing interest rate margins and a weakening currency. In terms of inventory data, copper stockpiles in LME-registered warehouses have climbed to their highest level since January, reaching 161,925 tons. Conversely, copper inventories in warehouses monitored by the Shanghai Futures Exchange fell by 1.8% last week. China's refined copper production in May saw a modest year-on-year increase of 0.6%, while May copper cathodes imports rose 17% year-on-year to 324,530 tons. The global refined copper market showed a surplus of 13,000 metric tons in April, down from a 123,000 metric ton surplus in March, according to the International Copper Study Group (ICSG).
Technically, the copper market is under fresh selling pressure, with a 36.9% gain in open interest to settle at 6982, while prices decreased by -17.7 rupees. Copper is currently supported at 844, with a potential test of 838.2 levels if this support is breached. On the resistance side, a move above 860.7 could see prices testing 871.6.