Copper held steady as a result of China’s hope on policy support


The optimistic developments in China’s policy support for its economy caused copper prices to marginally decrease by -0.05%, ultimately finishing at 729.5. China’s central bank gave a strong signal of support for the nation’s weak economy when it announced a significant reduction in bank reserves, bringing in approximately $140 billion to the banking sector. Furthermore, purported sources said that the Chinese government intended to allocate roughly 2 trillion yuan towards a stabilization fund, with the objective of procuring shares via the Hong Kong exchange link.

Although the encouraging improvements in China, worries over the decelerating growth in nonferrous metal physical demand as well as conflicting global macroeconomic data restrained additional price increases. The worldwide refined copper market had a shortfall of 119,000 metric tons in November, up from 48,000 metric tons in October, according to the International Copper Study Group (ICSG). In November, there were 2.26 million metric tons of refined copper produced worldwide, compared to 2.38 million metric tons of consumption. The ICSG noted that there was a 128,000 metric tons shortage in November that increased from a 70,000 metric tons deficit in October when inventory movements in Chinese bonded warehouses were taken into account.

From a technical perspective, the copper market showed signs of a long liquidation marked by a 1.6% drop in open interest to settle at the 4544 level..

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