Copper Gains as Copper Stocks In SHFE Warehouses fell 3.7% in the week

Copper Gains as Copper Stocks In SHFE Warehouses fell 3.7% in the week


Copper yesterday settled up by 0.37% at 810.4 as stocks in Shanghai Futures Exchange (SHFE) warehouses fell 3.7% in the week. China’s copper cathode output jumped 5.8% in February from a month earlier, as major smelters ramped up production after maintenance.
 
Copper smelters in China, made 785,900 tonnes of copper cathodes last month, up from a revised January output of 751,700 tonnes and 3.5% higher than February 2021. The rising output came as most producers had no maintenance outages planned for February, while environmental-related production curbs had a minor impact. In the first two months of 2022, the smelters churned out 1.53 million tonnes of copper, up 3.3% from the same period a year earlier.
 
On the macro front, the US non-farm payrolls in February delivered greatly better than expected results, and February CPI also recorded a new high in 40 years. The inflation prompted market participants to raise their bet on Fed’s rate hike. In addition, the negotiation between Russian and Ukrainian foreign ministers did not achieve any progress, and uncertainties from geopolitical tensions still exist. Signs of robust demand came against the backdrop of supply disruptions due to war in Ukraine and historically low inventories. Copper stocks held by LME were at 68,825 tonnes, the lowest level since 2005.
 
Technically market is under short covering as market has witnessed drop in open interest by -1.9% to settled at 2892 while prices up 2.95 rupees, now Copper is getting support at 801.6 and below same could see a test of 792.8 levels, and resistance is now likely to be seen at 820.7, a move above could see prices testing 831.
 
Trading Ideas:
# Copper trading range for the day is 792.8-831.
# Copper prices remained supported as copper stocks in Shanghai Futures Exchange (SHFE) warehouses fell 3.7% in the week.
# The US non-farm payrolls in February delivered greatly better than expected results, and February CPI also recorded a new high in 40 years.
# Chinese copper output rose in February.



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