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Copper

Copper prices gained in last quarter

Copper prices on major platforms marked a second straight quarterly gain owing to improved demand conditions due to resuming economic activities in China after the stringent lockdowns. China is the largest user of refined copper and accounted for more than 50 percent of the total global consumption value. The demand from China witnessed a drastic fall in 2022 due to a deepening economic slowdown due to pandemic-related lockdowns and a fall in property sector. The prices have marked gains in last two quarterly period as China’s authorities decided to withdraw its lockdown measures. However, copper prices are still below the prices seen in the same period last year in COMEX, LME and SHFE platforms, considering year over year performance. Prices are still capped by a stronger dollar and on fears of global economic slowdown that could adversely affect the demand for the red metal.

Global refined copper output rose 5.7% on year in January

Global output of refined copper rose nearly 5.7% on year to 2.27 million tonne in January, the International Copper Study Group said in its latest report. The global refined copper market surplus widened to 103,000 tonne in January from 12,000 tonne in the same period last year. In January, the global consumption of the red metal rose nearly 1.5% on year to 2.16 million tonne. In China, the largest refined copper producer, the output increased by 10% in January. In Chile, the second-largest producer, production declined 2% due to operational constraints and maintenance shutdowns at smelters. In the Democratic Republic of Congo, production rose about 13% due to ramping up of new solvent extraction and electrowinning plants. Global secondary production from scrap rose 4.7% on year to 376,000 tonne in the first month of the year. In January, demand from all countries, excluding China, is estimated to have increased 0.7% on year led by growth in European Union. Meanwhile, consumption in China grew 2% yoy

Rio Tinto and First Quantum Minerals partner to progress the La Granja copper project in Peru

Rio Tinto and First Quantum Minerals have entered into an agreement to form a joint venture that will work to unlock the development of the La Granja copper project in Peru, one of the largest undeveloped copper deposits in the world. La Granja in Northern Peru, that has the potential to be a large and longlife operation, with a published Indicated and Inferred Mineral Resource totalling 4.32 billion tonnes at 0.51 percent copper.

Warehouse Stock levels

Stock levels in the LME and SHFE registered warehouses declined last week, while COMEX’s warehouse stock levels increased

Outlook: Amid increasing demand from China, a major copper consumer, as well as lower inventories in major warehouses, a moderately positive trend is possible to see copper in the near terms.

COMEX Apr: Weakness expected only below 3.90. Else, recovery moves expected to continue as long as 3.9 holds downside.

MCX Apr: As long as prices stay above 740, further gains are possible. Whereas a dip below the same may induce weakness.

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