Copper had a marginal gain of 0.02%, settling at 727.2, driven by improved demand prospects in China. This positive sentiment overshadowed concerns about China's overall consumption and its troubled property sector. Copper inventories in LME-registered warehouses have been steadily increasing since mid-July, reaching their highest level since May 2022 at 155,700 tons, with recent deliveries to New Orleans contributing to this rise. While it's typical for copper inventory to rise during the northern hemisphere summer holidays, this year's increase is notable, driven in part by manufacturing challenges in Europe and the United States.
Additionally, a significant drop in LME time spreads suggests more copper may be heading to exchange warehouses. Since mid-July, almost 100,000 metric tons of copper have been warranted in LME warehouses, significantly boosting headline stocks, which were at just 54,225 metric tons on July 12. Copper shipments have been diverse, going to various delivery locations in Asia, Europe, and the United States.
From a technical perspective, the market saw short covering, as open interest dropped by -10.26% to 3462, while prices increased by 0.15 rupees. Copper's support level is at 724.8, with the possibility of testing 722.3 if it falls below. On the upside, resistance is likely at 730.1, and prices could test 732.9 if they break above it.
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