Copper Rose As Industrial Activity Picked Up And Demand Improved.

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Copper Rose As Industrial Activity Picked Up And Demand Improved.
Credit: © Reuters.

Copper closed higher by 0.68% at 829.8, driven by a surge in unwrought copper imports in China, indicating a robust industrial activity and improved demand in the world's largest consumer of the metal. This uptick in demand is further supported by Chile's state-run copper miner Codelco's efforts to enhance production, with expectations to surpass its 2023 output despite facing challenges in the previous quarter. Antofagasta (LON: ANTO )'s CEO highlighted the growing demand for copper, driven by its essential role in electric vehicles, solar panels, and other elements crucial for the energy transition.

This positive outlook for copper demand, coupled with supply constraints, could potentially drive prices higher in 2024. However, recent Western sanctions on Russian metals injected volatility into commodity markets, with the US and UK banning deliveries of certain Russian metal supplies, aiming to limit Russia's revenues funding its military operations in Ukraine. Such geopolitical developments could influence copper prices in the near term.

Technically, the market witnessed short covering, with a notable drop in open interest by -5.69% to settle at 3696, while prices rose by 5.6 rupees. Currently, Copper finds support at 826.9, with a potential downside test at 823.8. On the upside, resistance is anticipated at 834, with a breakthrough potentially leading to further testing at 838. Traders should monitor both fundamental factors driving demand and supply dynamics, as well as geopolitical developments, to navigate potential price fluctuations in the copper market.

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