Copper fell due to expectations of easier monetary policy from China

Copper prices fell -0.37% to 757.7 on prospects of looser monetary policy and a stronger dollar, hurting investor sentiment towards the industrial metal. Furthermore, growing stockpiles in LME warehouses, which reached their highest levels since February, put downward pressure on copper prices.

The increasing disparity between LME cash copper and the three-month contract, the highest since at least 1982, raised fears about near-term oversupply. Despite a modest decrease in SHFE warehouse inventories, copper stocks remained considerable, indicating strong Chinese output and imports.

While Chinese refineries maintained production in March, demand has been slow to recover, indicating a probable slowing in inventory accumulation. The focus now shifts to the speed of maintenance activities at Chinese smelters in the second quarter, which might alter supply dynamics.

According to the ICSG, the global refined copper market had a surplus of 84,000 metric tonnes in January, up from 27,000 metric tonnes in December, showing persistent difficulty balancing supply and demand.

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