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Copper Gains As Markets Assessed Near-Term Demand And Supply Shortage Concerns.

Published 10-05-2024, 03:26 pm
© Reuters.  Copper Gains As Markets Assessed Near-Term Demand And Supply Shortage Concerns.

Copper prices saw a modest uptick of 0.57% yesterday, closing at 859.85, as markets continued to weigh near-term demand dynamics against concerns about potential supply deficits. China, the world's largest producer of refined copper, demonstrated resilience in its demand for copper ore, with imports surging by 11.8% in April compared to the previous year, despite sharp price increases. This trend aligned with the country's robust factory activity, as indicated by PMI data during the period. 

However, setbacks in key mines and pessimistic future availability of copper ore have led to concerns among Chinese smelters, potentially resulting in a 10% output cut this year. While demand for copper ore remained strong, imports of unwrought copper and products in China dipped by 7.6% in April compared to March, reflecting dampened buying appetite amidst soaring global prices. The surge in copper prices, fueled by raw material shortages and optimism in sectors like new energy and AI, weighed on buying sentiment, as indicated by a drop in the Yangshan premium to zero for the first time on record in late April, signalling subdued import demand. 

Technically, the copper market observed fresh buying interest, with a 2.43% increase in open interest to settle at 6956, accompanied by a price increase of 4.85 rupees. Currently, copper finds support at 853.9, potentially testing 848 levels below, while resistance is anticipated at 863.3, with a potential upward move to 866.8 upon breach. This suggests a nuanced market sentiment, with investors monitoring both demand-side dynamics and supply-side challenges for further direction in copper prices.

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