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Below are Views On Supply worries arising from major Copper producing nations By Mr. Yash Sawant, Research Associate, Angel Broking Ltd.

Copper Up on an optimistic outlook

Supply worries arising from major Copper producing nations amid a weaker US Dollar has painted a favourable picture for the red metal prices.

The spot treatment charges for Copper plummeting below the global break-even point is a clear indicator of falling mine supply. Moreover, many Chinese smelters scheduling to go under maintenance due to low refining fee's can be a severe threat to the global Copper supply chain.

The potential supply threats came in line with the boost in global demand which was made evident from China’s solid trade data for March’21. As per reports, Chinese imports in March’21 soared over 38 percent (YOY), compared with 17.3 percent growth reported in February’21; whilst the exports rose 30.6 percent (yoy) in the similar time frame. 

With falling domestic output, China’s imports of industrial metals are expected to remain elevated in the coming months.

Global investors shunned the Dollar as the US Federal Reserve maintained its dovish approach and vowed to keep interest rates low for some time. Also, retreating Treasury yields pushed the U.S. currency to a multi-week low versus major peers making the Dollar prices metals more attractive. 

However, a persistent rise in the Copper Inventories in the LME monitored warehouses kept the prices in check.

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