Below are Quote and Outlook on Copper - Renewed concerns about price controls in China to keep copper prices lower By Mr. Abhishek Bansal, Founder Chairman, Abans Group.
Renewed concerns about price controls in China to keep copper prices lower
LME Copper 3M Contract is currently trading near $9800 per mt, sharply lower from last month's high of $10746per mt registered on May 10th. Renewed concerns about price controls in China have punished copper prices in the last two days.
China's state planner renewed its pledge to step up monitoring of commodity prices and strengthen supervision of spot and futures markets, as domestic producer inflation hit its highest in more than 12 years. China's May PPI rose +9.0% y/y, stronger than expectations of +8.5% y/y and the biggest increase in 12-1/2 years.
On the global economic data front, Japan May machine tool orders revised upward to +140.7% y/y from the previously reported +120.8% y/y, the largest increase in 10-3/4 years. However, German Apr exports rose +0.3% m/m, against expectations of +0.5% m/m. Also, German Apr imports fell -1.7% m/m, weaker than expectations of -1.1% m/m.
Copper prices are likely to find support from strong economic data from China. China’s exports grew by 27.9 percent in May compared with a year earlier. China’s imports grew by 51.1 percent last month, the fastest import growth since January 2011.
However, Copper prices are likely to get fresh direction from the ECB meeting later today along with US Inflation numbers which are important for the US Federal Reserve to decide on Interest rates and monetary stimulus.
Copper LME warehouse stock has marginally changed in the last one month from 123200mt to 127200mt as of 9 June 2021.
Copper prices are likely to trade negatively due to renewed concerns about price controls in China. It may find stiff resistance around $10200 per mt while it is likely to the immediate support level around 50 days EMA at $9734 per mt & 100 days EMA at $9203 per mt.
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