Copper prices are consolidating between $9250 - $9550 from the last several trading session after a sharp decline from the recent high of $10746 registered on May 10 to $9013.25 registered on June 21. Copper prices are under pressure due to some loss of physical demand in China.
China’s trade was supportive of industrial metals prices. Export growth accelerated to 32.2% in dollar terms in June from a year earlier against expectations of a slowdown to 23%. Imports climbed 36.7%, against the forecast of 29.5%. China’s trade surplus in June was $51.5 billion which is the highest since January.
However, copper prices found a setback as China’s copper imports fell for a third straight month in June. Imports of unwrought copper and copper products into China last month were 428,438 mt, which was down 3.9% mt in May and down 34.7% from 656,483 mt in June 2020.
Metals prices found some support after China’s central bank last week said it would cut the amount of cash banks must hold as reserves, releasing around 1 trillion yuan ($154.5 billion) in long-term liquidity to underpin a post-covid-19 recovery that is starting to lose momentum.
On the inventory front, copper warehouse stock at LME now stands at 222625mt which has increased by 82000mt in the last 30days as of 15 July 2021. Meanwhile, warehouse stock at SHFE now stands at 70243mt which has dropped 56780mt in the last 30 days.
Copper prices are consolidating in the range of $9250-$9550, likely to find a strong support base near $9263-9103 while immediate resistance level is seen around 20 days EMA at $9470 and 50 days EMA at $9542