As the dollar became stronger and fresh information heightened worries about China’s economic recovery, copper yesterday saw a 1.1% decline to settle at 729.35, threatening the outlook for base metal demand. While year-to-date copper imports fell by 10.7% to represent a steep decline in demand for industrial inputs, both Chinese imports and exports decreased more than anticipated in July. The outcomes coincide with readings of the manufacturing PMI that are contracting, as well as new indications of stress in the financial health of real estate developers, further obscuring industrial activity.
However, the drop was constrained by worries that in the next years, as demand for copper-intensive sustainable infrastructure increases, there may be severe shortages due to lower availability. Immediately after the industry titan disclosed that production in the first half of 2023 fell by 14%, state-owned Chilean miner Codelco increased its output projections for this year by 70,000 tonnes to 1.31-1.35 million tonnes.
According to figures from the General Administration of Customs, 451,159 metric tonnes of unwrought copper and copper products were imported in July. China’s copper imports dropped 20.7% to 3.3 million metric tonnes in the first seven months of 2023 compared to the same period in the previous year, according to customs data.
Technically, the market is experiencing new selling as open interest increased by 12.26% to settle at 6008 while prices are down by 8.1 rupees. Currently, copper is receiving support at 723.1, and a break below that level could result in a test of the 716.7 level. Resistance is now anticipated to be seen at 737.3, and a move above could result in a test of 745.1.
