Copper Steadied As Supply Concerns Offset Strength In Dollar And Uncertain Demand.

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Copper Steadied As Supply Concerns Offset Strength In Dollar And Uncertain Demand.

Copper settled marginally higher by 0.01% at 715.5 as supply concerns continued to linger, countering the strength in the dollar and uncertainties in demand. Global copper production faced constraints with the suspension of operations at First Quantum's Cobre mine in Panama, one of the world's largest open-pit mines. Similar challenges were noted elsewhere, as Anglo-American adjusted its copper output target for the year, reducing it by nearly 25% due to escalating operational costs. 

Chinese Premier Li Qiang provided insights into the country's economic landscape, stating that China's economy had rebounded and grew around 5.2% in 2023, surpassing the official target of approximately 5%. Li expressed confidence that the Chinese economy could navigate fluctuations in performance, emphasizing the enduring trend of long-term growth. Despite this positive outlook, concerns about lower demand amid China's economic slowdown tempered the metal's price increase. Copper stocks at major Chinese warehouses surged by almost 40% since the beginning of the year, reflecting hesitance among manufacturers to place substantial bids. 

From a technical standpoint, the copper market is undergoing short-covering, evidenced by a drop in open interest by -9.83% to settle at 5329. Despite the decline in open interest, prices managed a slight uptick of 0.1 rupees. Copper is currently finding support at 713.4, and a potential break below could test 711.1 levels. On the upside, resistance is likely at 717.7, with a move above potentially pushing prices to test 719.7.

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