Copper rose as stocks in bonded warehouses in China hit a record high of 81,800 tonnes
Copper rose 2.37% to 641.5 yesterday as bonded warehouse inventories in China continued to deplete and were last at a record high of 81,800 tonnes. However, the upside is seen as limited as weak appetite for risky assets amid fears of weakening global economic growth weighed on prices. As global central banks raised interest rates to curb persistent inflation, the outlook for global economic growth weakened and threatened demand for metals, and hurt risk sentiment. China’s major copper smelters increased their treating and refining (TC/RC) charges for the fourth quarter of 2022 by 32.9% year-on-year on steady smelting demand in a context of an expected global increase in the supply of concentrate.
The floor charge of $93 per tonne and 9.3 cents per pound was set at a meeting of the Chinese smelter purchasing team (CSPT). Fees are above the $80 per ton and 8 cents per pound set for Q3 2022, and also above the $70 per ton and 7 cents per pound set for Q4 2021. Miners pay TC/ RC to smelters to turn copper concentrate into refined metal, offsetting the cost of the ore. Loads fall when supply tightens and rise when more concentration is available.
Technically the market is under short cover as the market saw an open interest decline of -15.2% to settle at 5250 as prices are up 14.85 rupees, now copper is getting a support at 628.1 and below it could see a test of 614.6 levels. Resistance is now likely to be seen at 649, a move above could see prices test 656.4.
# Copper’s trading range for the day is 614.6-656.4.
# Copper remained supported as copper stocks in bonded warehouses in China continued to deplete and were last at a record high of 81,800 tonnes.
# However, the upside is seen as limited due to weak appetite for risky assets amid fears of weaker global economic growth
# LME copper stocks hit 129,000 tonnes, their highest level since August 15.