Factory activity in top metals consumer China expanded at a slower-than-expected pace in April as supply and transport bottlenecks weighed on production and overseas demand lost momentum. Copper’s rally, driven by a combination of optimism about recovery prospects for the pandemic-hit global economy and supply concerns, is likely to stall in the second half of 2021 as China reins in stimulus spending.
Goldman Sachs (NYSE:) forecast copper would average $9,675 a tonne in 2021, $11,875 a tonne in 2022 and $12,000 a tonne in 2023. However, Yangshan copper premium fell to $43 a tonne, its lowest since April 2017, indicating weakening demand from top consumer China as prices have leapt 24% this year. The global world refined copper market showed a 28,000 tonnes surplus in January, compared with a 1,000 tonnes deficit in December, the International Copper Study Group (ICSG) said in its latest monthly bulletin.
Technically market is under long liquidation as the market has witnessed a drop in open interest by -2.77% to settled at 3582 while prices down -2.85 rupees, now Copper is getting support at 749.3 and below same could see a test of 744.4 levels, and resistance is now likely to be seen at 761.6, a move above could see prices testing 769.
# Copper trading range for the day is 744.4-769.
# Copper prices dropped paring gains after data showed that copper stocks in Shanghai bonded area rose 7,000 mt from the prior week to 396,700
# However downside seen limited amid strong U.S. economic data and Fed’s commitment to continue supporting the economy fuelled investors’ appetite for risk.
# Goldman Sachs forecast copper would average $9,675 a tonne in 2021, $11,875 a tonne in 2022 and $12,000 a tonne in 2023.