Copper fell as concerns about China’s economic outlook continued to dim

  • Kedia Advisory
  • Commodities News
Copper fell as concerns about China’s economic outlook continued to dim
Credit: © Reuters.

Copper prices declined by -0.65%, settling at 708.35, primarily driven by concerns about China's economic outlook, leading to subdued forecasts for market demand. Moody's Investors Service downgraded its outlook for Chinese sovereign bonds to negative, reflecting global worries about escalating debt levels in the world's largest consumer of commodities. 

China's central bank's move to extend its trend of setting daily guidance fixes is seen as an attempt to stabilize the yuan after Moody's outlook downgrade. On the supply side, the decision by Panama to shut down First Quantum Minerals Ltd.’s Cobre operation, following a court ruling on the constitutionality of the mine's operating contract, is expected to reduce copper supply and challenge the global surplus projected for 2024, as the mine contributes about 1.5% to the world's copper supply. Chilean state-run copper miner Codelco reported a 5.7% year-on-year decline in production in October to 128,000 metric tons. The global refined copper market showed a 55,000 metric tons deficit in September, compared to a 21,000 metric tons deficit in August, according to the International Copper Study Group (ICSG). 

From a technical perspective, the copper market is undergoing fresh selling, with a 3.85% increase in open interest to settle at 5777. Prices are down by -4.65 rupees. Copper finds support at 704.6, with a potential test of 700.8 below that level. On the upside, resistance is likely around 714.6, and a move above could lead to a test of 720.8.

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