Weekly Base Metal Outlook : The slump, however, abated in the current week Says Mr. Saish Sandeep Sawant Dessai, Angel One
Below is Weekly Base Metal Write Up by Mr. Saish Sandeep Sawant Dessai, Research Associate- Base Metals, Angel One Ltd
The base metals group, which ended the week on a negative note, halted its three-week winning streak, while copper ended its four-week winning streak. The slump, however, abated in the current week, with the base metals group recovering back from the lows, while copper remained marginally behind. However, Copper did manage to recover some of its losses, owing to falling inventories in exchange warehouses and expectations of Chinese stimulus measures.
Despite worries about sluggish demand from the world's largest metals consumer, copper premiums have hit levels not seen since November of last year, indicating a tightening supply scenario. Copper stockpiles in SHFE and LME-registered warehouses have been falling, indicating limited availability. Floods in Chile, a major copper producer, also disrupted mining operations and supported prices.
Addressing a World Economic Forum event in Tianjin, Chinese Premier Li Qiang emphasised the need to boost demand, stimulate markets, and encourage development while accelerating the green transition and opening important sectors of the economy to the global market. Although no specifics about China's intentions were disclosed, Li expressed optimism that second-quarter economic growth would exceed the first quarter and reach the yearly target of around 5%.
In response to weaker-than-expected industrial output and retail sales data, several major banks, including Nomura, have lowered their China GDP predictions for 2023, emphasizing the likely need for more policy stimulus measures.
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