Copper prices declined by 1.53%, settling at 806.35, primarily weighed down by a strengthening U.S. dollar as traders adjusted their expectations for U.S. Federal Reserve rate cuts. Despite this, copper prices continued to find support from optimism surrounding Chinese demand, fueled by recent stimulus measures. The People's Bank of China recently lowered its one- and five-year loan prime rates by 25 basis points and hinted at further easing, including potential reserve requirement cuts before year-end, aimed at bolstering economic growth. In terms of supply and demand, the shift toward cleaner energy has raised concerns about potential copper shortages, as miners are struggling to ramp up production.
Meanwhile, China's refined copper production in September rose by 0.4% year-on-year to 1.14 million metric tons, while its imports of unwrought copper in September increased by 15.4% month-on-month, reflecting improved seasonal demand and a positive consumption outlook. However, despite this increase, the import figures remained close to those from September 2023. On the global front, the refined copper market posted a surplus of 54,000 metric tons in August, a decrease from July’s 73,000 metric tons surplus, according to the International Copper Study Group (ICSG). For the first eight months of 2024, the market registered a surplus of 535,000 metric tons.
From a technical perspective, the market witnessed long liquidation, with open interest falling by 16.98% to settle at 4,752 contracts. Copper is now finding support at 800, with a further drop potentially testing 793.6 levels. Resistance is expected at 815.4, and a move above this level could push prices toward 824.4. Traders are closely watching these key support and resistance levels for short-term direction.