IGI Logo

Copper prices were held up in a relatively narrow range in the past few months period as the market asserted the demand and supply conditions for the upcoming period amid wider economic challenges is being faced by major economies. China, the major consumer of industrial metal copper, has been undergoing a serious crisis throughout last year. Although the borrowing cost were maintained lower by the central bank, lack adequate stimulus support measures have rather slowed down the recovery momentum of the worlds second largest economy. For the last four months, consumer prices in the second-largest global economy have been experiencing deflation, marking their most rapid annual decline in 15 years as of January, falling 0.8% annually. Meanwhile, China’s producer prices declined 2.5%, posting decline for a 16th month. In January, the official Purchasing Managers' Index (PMI) in China experienced a modest rebound, albeit staying below the pivotal 50-mark that distinguishes growth from contraction. Additionally, apprehensions emerged from U.S. inflation data surpassing expectations in January, sparking speculation that potential cuts to elevated interest rates might be postponed. U.S. inflation grew at a faster than expected rate of 3.1% in January, which is still above Fed’s 2% objective.

Nevertheless, Copper prices received some support as the copper stocks in LMEregistered warehouses shrank to the lowest level since September. Besides, sturdy demand from green energy sector would bolster the metal in the near term.

Global refined copper output to rise 4.6% in 2024 - ICSG

Global output of refined copper is projected to grow 3.8% to 26.33 million tonne in 2023 and 4.6% to 27.53 million tonne in 2024, the ICSG said. The global refined copper market is expected to see a deficit of 27,000 tonne in 2023 compared to a deficit of 114,000 tonne projected in April due to a higher anticipated growth rate in usage from China. The global body sees a surplus of 467,000 tonne in 2024 as a consequence of additional supply, from the earlier forecast of 298,000 tonne in April. The ICSG sees global consumption of the red metal to rise 2% to 26.36 million tonne in 2023 and 2.7% to 27.07 million tonne in 2024. Global secondary production from scrap is expected to increase in 2023 and 2024, supported by the development of new secondary smelter and refinery capacity, the report said.

Warehouse stock level

The Copper inventory levels in LME registered warehouses declined last week by 5625 MT and totalled 130675 MT. The inventory level in SHFE registered warehouses increased by 17743 MT to 86520 MT in the last week. COMEX warehouses added 2323 MT of copper stocks last week and totalled 24880 MT.

Outlook:

COMEX March: The trading range seen narrowing down in the last few months period. Prices may strengthen with sturdy move above $3.90 resistance. Weakness may be induced with corrective dip below $3.50 region.

MCX March: Sturdy move above 740 may strengthen the prices. Weakness could be witnessed if prices dip below 694 region.

For More Geojit Financial Services Ltd Disclaimer https://www.geojit.com/disclaimer 

SEBI Registration Number: INH200000345