Copper Dropped on Profit Booking after Prices Rallied amid Supply Disruptions – EQ Mag Pro
Copper yesterday settled down by -4.68% at 800.8 on continued profit booking after prices rallied amid lingering worries of supply disruptions due to war in Ukraine and historically low inventories. Copper stocks held by LME were at 68,825 tonnes, the lowest level since 2005. In February, those in the Shanghai Futures Exchange and Comex were below 200,000 tonnes.
Suppliers are especially low in Europe and although Russia accounts only for 4% of global production Europe is the primary export market. Adding to woes, the world’s biggest producer Chile, recorded its lowest January output since 2011, with production sinking 15% compared to December and 7.5% from January 2021. On the other side, copper usage is surging, especially in developed countries, with increasing demand for electric vehicles, wind farms, solar panels, and power grids.
On the fundamentals, domestic copper cathode output in February stood at 835,700 mt, up 2.1% month-on-month (MoM) and 1.7% year-on-year (YoY). And it is expected that China’s copper cathode output will be 865,900 mt in March, an increase of 3.6% month on month and 0.6% year on year. Only a small number of smelters in north China were affected by the Winter Olympics, reducing the output by about 15,000 mt.
Technically market is under fresh selling as the market has witnessed a gain in open interest by 1.05% to settled at 2885 while prices down -39.3 rupees, now Copper is getting support at 779.3 and below same could see a test of 757.7 levels, and resistance is now likely to be seen at 836.2, a move above could see prices testing 871.5.
Trading Ideas:
# Copper trading range for the day is 757.7-871.5.
# Copper dropped on continued profit booking after prices rallied amid lingering worries of supply disruptions due to war in Ukraine and historically low inventories.
# Copper stocks held by LME were at 68,825 tonnes, the lowest level since 2005.
# In February, those in the Shanghai Futures Exchange and Comex were below 200,000 tonnes.
Source : investing
