Weekly Outlook on Copper

Copper Prices Struggle Amid Weak China Demand And Global Supply Disruptions

Copper Fundamentals:

Copper prices slipped by 0.14%, ending at ₹785.15, as they were weighed down by rising metal inventories and lackluster economic data from China. In the U.S., July's producer price index increased less than anticipated, hinting at a moderation in inflation and initially boosting the metals market. Despite this, concerns about demand in China, the world's top consumer, dampened sentiment. The country’s bank lending hit a 15-year low in July, fueling expectations for more easing measures from its central bank but also highlighting ongoing struggles in its economic recovery.
 

Supply Disruption:

On a global scale, copper also faced supply-related challenges. Workers at the Escondida mine in Chile, the largest copper mine globally, announced a strike after talks with BHP failed, threatening to cut production significantly. Similarly, Peru reported an 11.7% decline in copper output year-on-year for June, further adding to supply worries. 

Technical Outlook:

From a technical standpoint, copper prices exhibit a mixed outlook. The recent dip to ₹765 suggests ongoing bearish momentum, but there are signs that the market may be stabilizing. Key support levels near ₹760 could provide a floor for prices, and a sustained above this level may lead to a rebound. However, if prices breach this support, further declines could be on the horizon, with the next critical level around ₹750.

200-Days Exponential Moving Averages are supporting the pullback move and prices are struggling near to 800 mark but the Relative Strength Index (RSI) reversed from the oversold zone with positive crossover on the daily scale, which could trigger a short-term recovery. Hence, Traders are advised to remain cautious and wait for clearer signals from both economic data and supply-demand dynamics.

Important Levels of Copper Price: