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Copper yesterday settled up by 1.24% at 746.25 amid persistent concerns that tight supply and increasing demand may cause shortages. State-owned Chilean miner Codelco revised its output projections by 70,000 tonnes to 1.31-1.35 million tonnes this year due to explosions and delays in key mines, shortly after the giant reported that production in the first half of 2023 tanked by 14% year-on-year.
The data follows a 7% output decline from the company in 2022, aligning with warnings by miners and market players that low supply levels are unable to keep up with rising demand due to copper’s key use in sustainability-oriented infrastructure. Key manufacturing PMIs in China pointed to another factory activity contraction in July, strengthening the case for the government to step in and support the country’s industrial sector. Hot GDP data from the US also added to bullish demand calls, supporting prices. The global refined market showed a 65,000 metric tons deficit in May, compared with a 33,000 metric tons surplus in April, the International Copper Study Group (ICSG) said in its latest monthly bulletin. For the first 5 months of the year, the market was in a 287,000 metric tons surplus compared with a 74,000 metric tons deficit in the same period a year earlier, the ICSG said.
Technically market is under short covering as the market has witnessed a drop in open interest by -6.48% to settle at 4804 while prices are up 9.15 rupees, now Copper is getting support at 737.8 and below same could see a test of 729.2 levels, and resistance is now likely to be seen at 750.8, a move above could see prices testing 755.2.
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