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Copper prices exhibited volatile trades in last week on major exchange platforms after Russia attacked Ukraine, which spooked fears further supply disruption to the metal. At the same time market fundamentals still support the prices as global industry activity picking pace after the pandemic which coupled with supply chain issues and led to low inventories.

Global Economy

Global equities tumbled in previous week after western nations announced a set of sanctions to Russia for its attack against Ukraine. Escalating conflicts between two nations and related uncertainty have shaken risky assets across world.

US Dow Jones Industrial Average index shed more than 3.00 percent last week on developments over Russia–Ukraine conflicts. US 10– year Treasury yield remained below 2% .The pan-European STOXX index slipped to lowest level since May 2021 in previous week. Asian equities dopped as well on risk aversion.

US consumer confidence dropped to five month low in February

The US economy ended 2021 by expanding at a brisk 7% annual pace from October through December, the government last week , a slight upgrade from its earlier estimate as businesses stepped up their restocking of supplies.

The euro area annual inflation rate reported at 5.1 per cent in January this year, up from 5 per cent in December 2021. A year earlier, the rate was 0.9 per cent. European Union’s (EU) annual inflation was 5.6 per cent in January 2022, up from 5.3 per cent in December

Copper

Chinese, European copper premiums fall; China's premium for imported copper cathode tumbled to a seven-month low in the week to February 22

MCX copper exhibited volatile moves in previous week

Non-ferrous metals on major platforms were seen volatile in last week as worries of supply disruptions gripped market on the backdrop of Russia’s invasion in Ukraine. Russia is a significant player in base metals market, mainly Nickel, Aluminium and also a remarkable in Copper. The rising tension in the region threatened further disruption to already beleaguered global supply chains. Russia produced 920,000 tonnes of refined copper last year, about 3.5% of the world output, according to U.S Geological Survey (USGS). While fresh sanctions against Russia from western countries fuelled fears of supplies of key metals, which may further squeeze the availability of metals in global platform. Surprisingly, last week copper prices settled lower in most of the exchanges by giving back gains on speculation that sanctions on Russia may be less acute than previous expected. While improving global industrial activity from pandemic lows along with tight supplies and depleting inventories in major exchange run warehouses continue to support the red metal.

China’s January Copper output slipped

China's January copper cathode output from major smelters fell 7.49% from the prior month due to maintenance and the holiday season. Production from 22 smelters which covers 83% of China's total capacity, stood at 742,100 tonnes in January, down from revised December output of 802,200 tones, but was up 2.99% on an annual basis.

Copper market registers deficit of 79,000 tons in November 2021-ICSG

The global world refinedThe world market for refined copper posted a deficit of 79,000 tonnes in November, compared with a shortfall of 34,000 tonnes the previous month, the International Copper Study Group (ICSG) reported in its latest monthly bulletin. Between January and November of last year, the copper market registered a shortage of 339,000 tons, compared to a deficit of 487,000 tons in the same period of the previous year, according to the ICSG. World production of refined copper in November was 2,073 million tons, while consumption was 2,152 million tons.

Copper Warehouse Data

Copper inventories in LME registered warehouses increased moderately by 500 tonnes. Shanghai Copper inventories incremented by more than 16.00 percent on downstream consumption Chinese new year holidays . Meanwhile, inventories monitored by COMEX exchange slipped lower by 2425 tonnes.

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