Copper Gained as China's PBOC Pledges Policy Support to Counter Pandemic Woes

Copper Futures yesterday settled up by 0.24% at 765.45 on short-covering as China's PBOC pledges policy support to counter pandemic woes. The global copper market is expected to see a surplus of 142,000 tonnes this year and 352,000 tonnes in 2023, the International Copper Study Group (ICSG) said. "World mine production this year is expected to benefit from the additional output from new and expanded mines as well as an improvement in the general situation regarding the pandemic," the ICSG said in a release.

Global refined copper production is expected to rise by about 4.3% in 2022 and 3.6% in 2023, mainly supported by the continued expansion of Chinese electrolytic capacity and new and expanded operations in the Democratic Republic of Congo (DRC). World apparent refined copper usage is expected to increase by about 1.9% in 2022 and 2.8% in 2023, the Group said. ICSG revised the world usage growth down to 1.9%, citing a weaker global economic outlook mainly as a consequence of the Russia-Ukraine situation and the negative effect COVID-19 related lockdowns in China.
 

Fitch said it has cut China's GDP growth forecast for 2022 to 4.3% from 4.8%, saying pandemic-related disruptions have had an impact on the country's economy in the first two quarters of the year. Global copper smelting activity rose in April even as COVID-19 lockdowns intensified in top producer China, data from satellite surveillance of metal processing plants showed.
 

Technically market is under short covering as the market has witnessed a drop in open interest by -3.15% to settle at 4217 while prices up 1.8 rupees, now Copper is getting support at 757.6 and below same could see a test of 749.6 levels, and resistance is now likely to be seen at 770.7, a move above could see prices testing 775.8.