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Supply Worries And Growth Forecast To Support Copper Prices

By Abhishek BansalCommoditiesApr 07, 2021 04:10AM ET
www.investing.com/analysis/supply-worries-and-growth-forecast-to-support-copper-prices-200571655
Supply Worries And Growth Forecast To Support Copper Prices
By Abhishek Bansal   |  Apr 07, 2021 04:10AM ET
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LME copper prices hovering near $9,000 per mt which have bounced from the recent low of $8,696 per mt after Chile closed its borders over a spike in coronavirus infections. Supply concern from Chile is likely to support copper prices, coronavirus cases in Chile surged past 1 million. 

Meanwhile, Chile's Codelco, the world's biggest copper miner, increased production by 2.1% year-on-year in February to 122,800 tonnes, according to state copper commission Cochilco.

LME copper warehouse inventory has increased significantly in the last 30 days to 143,775 mt as of Apr. 5 from Mar. 8 level of 84,250 mt.

LME Copper inventory increased by 70% in one month time period, which is indicative of low physical demand.

However positive global economic data is supporting the industrial metal. US Feb JOLTS job openings unexpectedly rose +268,000 to a 2-year high of 7.367 million, against expectations of a decline to 6.900 million.

Also, Eurozone Apr Sentix investor confidence rose +8.1 to a 2-1/2 year high of 13.1, against expectations of 6.7. Additionally, the China Mar Caixin services PMI rose +2.8 to 54.3, stronger than expectations of 52.1.

As per the latest IMF report, the global economy is expected to expand by 6 percent this year, up from a previous projection of 5.5 percent, after a contraction of 3.3 percent in 2020. Among the emerging market and developing economies, China and India are expected to lead the way which is supportive for industrial activity.  IMF has upgraded the global growth forecast for the year after vaccinations drive hundreds of millions of people.

However, demand concerns due to the rapidly spreading deadly coronavirus in Eurozone and India is likely to limit the gain which is forcing governments to new lockdown in specific regions. 

Positive economic data and supply concern in Chile is likely to support copper prices. It may find minor resistance around $9,198-$9,292 per mt while immediate support level is seen near 20 days EMA at $8,921 per mt and 50 days EMA at $8,692 per mt.

Supply Worries And Growth Forecast To Support Copper Prices
 

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Supply Worries And Growth Forecast To Support Copper Prices

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Disclaimer: Mr. Abhishek Bansal is a new-age, first-generation entrepreneur, and the Founder Chairman of Abans Group, a quintessential diversified business group, providing expertise in Broking Services, Non-Banking Financial Dealings, Financial Services, Agri-Commodity Services, Warehousing, Realty & Infrastructure, Gold Dore Refinery & Manufacturing, and Trading in Metal Products, Pharmaceuticals, Software Development & Wealth Management.
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