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Shanghai copper surged to more than one month high on tightening global supplies and speculation of additional stimulus measures from top consumer– China.

Copper

• China’s copper imports in March fell for a third consecutive month, slipping 8.8% from the same period a year earlier.

• Chile’s January copper production fell 7.5% from the same month in 2021 to 425,700 tonnes — the lowest in 11 years.

MCX copper seen steady in previous week

Copper prices were closed on positive territory in the last week bolstered by supply tightness and on optimism of further stimulus measures from top consumer China as ongoing covid situation weighed the growth recovery. While copper prices on Indian futures platform were seen consolidating since last few weeks, however persistent market tightness and depleting global inventory levels continue to support prices on a broader perspective. Meanwhile on going conflicts between Russia and Ukraine and related sanctions affected the availability of the red metal from Russia.

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 potential supply disruption due to water stress in Chile and socio– political unrest in Peru continue to influence the prices sentiments as well. Because of crisis, proposed new laws in Chile and Peru to initiate higher industry taxes may slow down mining investment and activity in copper and which could lead to lower outputs in near term.

COMEX copper futures eased moderately last week and settled near USD4.717/ lbs. LME copper three month futures also eased slightly and settled near USD10315 per MT. Meanwhile, SHFE futures gained 1.91 percent to CNY 75090 per MT last week. The Most active MCX Copper futures gained 0.35 percent to Rs.822.65 per kilogram.

Cochilco raises 2022 copper price forecast to $4.40/lb The Chilean Copper Commission (Cochilco) raised its projection for 2022 copper prices to $4.40 per pound, amid a perceived scarcity due to the Russia-Ukraine conflict. For 2023, Cochilco projected a price of $3.95 per pound, up from $3.80 in January. It projected Chilean copper production at 5.78 million tonnes for 2022, a 2.6% year-on-year increase. According to Cochilco, the world market for refined copper will have a deficit this year of 104,000 tonnes.

Copper market deficit narrowed slightly in 2021 to 475,000MT — International Copper Study Group The ICSG says mined production grew 2.2% in 2021 to 21.096Mt with concentrate production lifting around 3.9%, with the world’s second largest copper miner Peru increasing production by 7% after being hammered by Covid-19 a year earlier

Copper Warehouse Data Copper inventories in LME and COMEX registered warehouses increased by 5075 and 3957 MT respectively. However inventories in Shanghai accredited warehouses decreased by 7899 MT.

Outlook: Broad trend remains positive on supply issues and lower global inventories. Improved industrial activities across the globe may also assist prices to edge higher. However, Covid related lock down in China and a strong dollar likely to restrict major gains.

COMEX: Broad trend remains on the positive side as long as prices stay above the stiff support of $4.20.

MCX Apr: Inability to break the support of Rs 780 there are more potential upside in cards. Consistent trades below Rs 770 is a sign of weakness.

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