The price of copper yesterday increased by 0.26% to 714.3 as rising supply worries and hopes for government assistance overshadowed signs of weak demand. Since metal is a crucial raw material for the switch to renewable resources, major market players have continued to raise worries that the supply of copper cannot keep up with anticipated long-term demand.
At the Shanghai Futures Exchange, copper stockpiles were below 135 thousand tonnes in May, the lowest level this year, and at the London Metal Exchange, they were below 60 thousand tonnes, the lowest level since 2005. The output is also expected to decrease by as much as 7% this year, following a 10.6% reduction in 2022, according to Chile.
Meanwhile, worrying statistics on China’s manufacturing activity and industrial growth increased speculations on the country’s upcoming stimulus measures. According to the International Copper Study Group (ICSG)’s most recent monthly bulletin, the global refined copper market had a 2,000-tonne surplus in March, down from a 196,000-tonne surplus the month before. The ICSG reported that global demand and output of refined copper were both 2.310 million tonnes.
Technically, the market is seeing new buying as open interest increased by 1.27% to close at 6626 while prices increased by 1.85 rupees. Currently, copper is receiving support at 711.9 and a move below that level could result in a test of the 709.3 level. Resistance is now anticipated to be seen at 717.3, and a move above could result in a test of 720.1.
