Copper Fell On Concerns About Demand China, Patchy Global Industrial Activity

  • Kedia Advisory
  • Commodities News
Copper Fell On Concerns About Demand China, Patchy Global Industrial Activity
Credit: © Reuters.

Copper faced a decline of -0.84% yesterday, settling at 715.95, driven by concerns over demand in China, uneven global industrial activity, and expectations of prolonged higher U.S. interest rates. Persistent worries about China's real estate sector and uncertainties regarding the trajectory of Federal Reserve policies contributed to the negative sentiment surrounding copper . The apprehension about demand was evident in the copper inventories in warehouses monitored by the Shanghai Futures Exchange, which surged by 36%, reaching their highest level since July. LME cash copper's discount to the three-month contract also hit a record high of $109, indicating weak demand dynamics.

Despite some support from declining copper stocks in LME-registered warehouses to their lowest level since September, overall sentiment remained bearish. In Chile, the world's largest copper producer, output remained unchanged year-on-year in December at 495,537 metric tons, as reported by the country's INE statistics agency. However, manufacturing production in Chile saw a 1.8% decrease during the same period, according to INE. China's Nonferrous Metals Industry Association (CNIA) advised copper smelters to cut production and postpone new projects due to tightening raw material supplies, following the closure of a major copper mine in Panama.

Technically, the copper market is witnessing fresh selling momentum, with a 6.44% increase in open interest, settling at 5,207. Copper is currently finding support at 713.2, and a breach below this level could lead to a test of 710.4. On the upside, resistance is expected at 720.7, with a move above potentially testing 725.4.

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