Copper Dropped As Shanghai Warehouse Stocks Up 11.5%

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Copper Dropped As Shanghai Warehouse Stocks Up 11.5%

Copper experienced a modest decline of -0.52%, settling at 731.6, driven by an 11.3% increase in copper inventories in warehouses monitored by the Shanghai Futures Exchange. Despite this, the downside was limited as LME-registered warehouse stocks decreased by 32% this year to 114,075 tons. The global copper market faced mixed signals, with China announcing a 5% growth target for 2024 at a parliamentary meeting, disappointing some investors anticipating more extensive stimulus measures. China's manufacturing sector also witnessed its fifth consecutive month of contraction in February, prompting calls for increased stimulus to stabilize growth. 

In contrast, China's unwrought copper imports in the first two months of 2024 rose by 2.6% from the previous year, indicating improving demand. Arrivals of unwrought copper and products reached 902,000 metric tons in January and February, up from 879,000 tons in the same period a year earlier. Additionally, imports of copper concentrate increased by 0.6% to 4.66 million tons during the first two months of the year. China's major copper smelters are set to convene in Beijing to discuss measures, including potential production cuts, to counter the significant drop in ore processing fees, which have hit their lowest levels in years. 

Technically, the copper market observed long liquidation, with a -3.59% drop in open interest, settling at 4,103, while prices experienced a decline of -3.85 rupees. Currently, copper finds support at 727.6, potentially testing 723.5 if breached. On the upside, resistance is likely at 738.7, and a move above could see prices testing 745.7.

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