Copper Rose Benefits From Momentum-Following Funds, Strong German Industrial Data

  • Kedia Advisory
  • Commodities News
Copper Rose Benefits From Momentum-Following Funds, Strong German Industrial Data
Credit: © Reuters.

Copper experienced a robust increase of 1.83%, settling at 816.05, driven by demand from momentum-following funds, strong German industrial data, and a rally in other commodities. The surge in copper prices was supported by positive manufacturing data from China, expectations of interest rate cuts in the US and Europe, and elevated sentiment towards commodities in general. Rebound in US manufacturing, along with encouraging Chinese manufacturing PMIs, challenged concerns about a downturn in the sector, which is significant for copper demand. On the supply side, disruptions in major African mines compounded previous setbacks in key mines in Panama and South America, leading to a downward revision in copper production guidance by over 160,000 tonnes by Anglo American (JO: AGLJ ).

Chinese smelters responded by contemplating a joint reduction in output to improve margins. Additionally, the record-high discount for LME cash copper over the benchmark three-month contract suggests ample immediate supply availability. Despite challenges, Chile's copper exports reached $4.09 billion in March, albeit down 5.5% from the previous year, as reported by the central bank. In Japan, refined copper production is anticipated to increase by 4.2% in the first half of the 2024/25 financial year, driven by stronger local demand from the chip industry.

From a technical standpoint, the market witnessed fresh buying interest, with a rise in open interest by 3.09% alongside a price increase of 14.65 rupees. Copper is currently supported at 803.1, with potential further testing at 790.2, while resistance is anticipated at 824.2, with a potential breakout leading to testing of 832.4.

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