Weak Chinese manufacturing data sent copper prices lower, raising concerns about demand. | So Good News


Copper settled down -0.77% yesterday at 647.05 as rising COVID-19 cases and weak production data in China, the biggest consumer, raised concerns over weak demand. The yuan has fallen to its lowest level since 2007 as COVID restrictions hit factories in several Chinese cities. Prices of the metal, used in electricity and construction, have fallen more than 30 percent from March peaks in China and Europe as economic growth slows. The US is likely to enter an economic recession. However, President Xi Jinping’s loyalists at this month’s Communist Party Congress and investors are yet to confirm his acceleration of COVID-09 policies.

Elsewhere in the world, the U.S. Federal Reserve is expected to raise interest rates by another 75 basis points this week, curbing economic growth to curb inflation. The Bank of England is preparing to raise bumper interest rates, and European inflation has rebounded from earlier expectations, sending record highs that suggest rates could rise further. Copper stocks in warehouses monitored by the Shanghai Futures Exchange fell 29.2 percent from last Friday, the exchange said. The global market is expected to reach about 325,000 tonnes this year and a surplus of 155,000 tonnes in 2023, according to the International Copper Study Group (ICSG).

Technically the market is under fresh selling as we saw opening interest at 5708 with 14.69% open interest, the market fell -5 Rs and now Copper is at par with 643.9 and may test 640.8 level. , And resistance is now likely to be seen at 650.3. An upward move could see prices testing 653.6.

Trade ideas
# Copper trading range for the day is 640.8-653.6.
# Copper prices fell as rising COVID-19 cases and weaker-than-expected production data in China raised concerns about weak demand.
# The yuan fell to its lowest level since 2007 as COVID restrictions hit factories in several major Chinese cities.
# China’s central bank reiterated that it will increase credit support for the economy and keep the yuan stable.


Source link