Copper fell on profit booking after prices rallied amid supply disruptions

yesterday steadied -4.68% at 800.8 on continued profit bookings after prices rallied amid lingering fears of supply disruptions due to war in Ukraine and stocks historically low. Copper stocks held by the LME stood at 68,825 tonnes, the lowest level since 2005. In February, those on the Shanghai Futures Exchange and Comex were below 200,000 tonnes.

Suppliers are particularly weak in Europe and although Russia represents only 4% of world production, Europe is the main export market. Adding to the woes, Chile, the world’s largest producer, recorded its lowest production in January since 2011, with production down 15% from December and 7.5% from January 2021. On the other hand, the use of copper is increasing, especially in developed countries, with an increase in demand for electric vehicles, wind farms, solar panels and power grids.

On fundamentals, domestic copper cathode production in February came to 835,700 tons, up 2.1% month-on-month (MoM) and 1.7% year-on-year (YoY). And China’s copper cathode output is expected to reach 865,900 tons in March, up 3.6% m/m and 0.6% y/y. Only a small number of foundries in northern China were affected by the Winter Olympics, reducing production by around 15,000 tonnes.

Technically the market is in a fresh sell as the market saw an open interest gain of 1.05% to settle at 2885 while prices fell -39.3 rupees, now copper is getting support at 779.3 and below it could see a test of 757.7 levels and resistance is now likely to be seen at 836.2, a move above could see prices test 871.5.

Trading Ideas:
# Copper’s trading range for the day is 757.7-871.5.
# Copper fell on continued profit bookings after prices rallied amid lingering fears of supply disruptions due to the war in Ukraine and historically low inventories.
# Copper stocks held by the LME were at 68,825 tonnes, the lowest level since 2005.
# In February, those of the Shanghai Futures Exchange and Comex were below 200,000 tonnes.