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"Quote - Copper" by Mr. Saish Sandeep Sawant Dessai, Research Associate- Base Metals, Angel One Ltd

It appears that the base metals pack is weakening in response to macroeconomic issues, with most recently being the lackluster Chinese industrial output data, which increased 5.6% year on year in April, up from 3.9% in March but below the consensus of 10.9%. This lower-than-expected industrial production and consistent export growth indicate poor domestic demand, which will likely necessitate additional policy stimulus measures as the country's economic recovery fades.

China's central bank kept the interest rate unchanged, but investors are anticipating further monetary easing in the coming months as internal data shows areas of economic weakness. Other challenges include the strengthening dollar, uncertainties over the US debt ceiling, and US interest rates.

This week, copper prices fell to their lowest levels in 5-months. Deteriorating demand outlook in top consumer China, rising stockpiles in London Metal Exchange (LME) certified warehouses, and a strong dollar that capped gains put pressure on the metal used in construction and energy. Copper supplies in LME warehouses have increased by more than 40% in the last month, reaching their highest level since November 2022.

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