Copper Gains As LME Stocks Hit The Lowest Level Since September

  • Kedia Advisory
  • Commodities News
Copper Gains As LME Stocks Hit The Lowest Level Since September
Credit: © Reuters.

Copper prices experienced a marginal decline of -0.08%, settling at 707.65, influenced by various factors in the global market. LME daily data revealed that copper stocks in LME-registered warehouses reached their lowest level since September, following 850 tons of outflows. This decline in inventory signalled potential tightness in the copper market. The strengthening of the U.S. dollar, supported by robust labour data and hawkish remarks from Fed Chair Powell, exerted pressure on the purchasing power of key copper importers.

Additionally, concerns over macroeconomic challenges in the Chinese economy, marked by the fourth consecutive contraction in the official manufacturing PMI data for January, further weighed on the outlook for base metals. Despite the challenges, the Caixin China General Manufacturing PMI unexpectedly stood at 50.8 in January, matching December's figure and surpassing market forecasts. It marked the third consecutive month of growth in factory activity, contrasting with official data that indicated prolonged weakness ahead of the Lunar New Year celebration. According to the International Copper Study Group (ICSG), preliminary data released in January suggested a 1% increase in world copper mine production over the first 11 months of 2023.

Technically, the copper market is currently witnessing long liquidation, with a notable drop in open interest by -12.84%, settling at 5296. Copper is finding support at 705.4, and a breach below may lead to a test of 703.1 levels. On the upside, resistance is anticipated at 711.8, with a potential move above prompting a test of 715.9.

Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

Error: File type not supported

Drop an image here or

100

Related Articles