OfBusiness Copper Dailies

9th June’23

Price

• Yesterday LME copper prices closed up by 0.95% at $8,372/mt. Trading volumes were 17,000 lots and open interest stood at 252,000 lots.
• MCX Copper was up by 0.55% at Rs.725/kg.
• The most active SHFE 2307 copper contract finished at 67,000 yuan/mt overnight, up 0.34%. Trading volume was 37,000 lots and open interest stood at 185,000 lots.
• Today, LME Copper open almost flat but trading down by 0.22% at $8329 and MCX Copper trading down by 0.3% at Rs.722.85/kg.

Demand and Supply

• The price spread between the SHFE front-month and SHFE next-month copper contracts is unlikely to expand. The spot market transactions were sluggish yesterday.
• The inventory in south China increased, mainly due to the increase in arrivals and the decrease in outbound shipments. Sellers adjusted prices but downstream buying interest was weak. The overall transaction was relatively quiet. On the whole, there were many smelters undertaking maintenance in June, and the supply of goods in the market was tight. But the downstream demand was also weak
• LME Copper warehouse opening inventory yesterday was increased to 100100 mt and MCX Copper inventory was 1913mt.

News

• Chiles Copper export shows that supply side is improving. At first glance, the latest copper numbers out of Chile appear to fit the recent narrative of supply-side disappointments. A closer look, however, suggests output may be improving in the top-producing nation.The data suggest Chilean production may be stabilizing after a series of project delays, mine-specific setbacks and plant maintenance. That follows monthly data showing Peruvian output rising sharply and the Congo’s giant Kamoa-Kakula mine continuing to ramp up.
• BHP’s Xplor looking for more copper, nickel exploration projects: BHP expects the world to need twice the amount of copper presently produced by 2030, and four times the current supply of nickel.
• A work stoppage order by a Chilean environmental court on Thursday will prevent Canadian miner Lundin from reopening its Alcaparrosa copper mine, which it closed nearly a year ago after a gaping sinkhole opened in a nearby village.

OFB’s Opinion

• Based on the positive news of China’s stimulus measures for the property sector and better-than-expected US jobless claims data, copper prices rose yesterday. However, uncertainty remains regarding future Fed rate hikes, and the market is eagerly awaiting US inflation data. Unfortunately, downstream demand remains sluggish with no signs of improvement in the near future. As a result, copper prices are highly sensitive to macro data news and will continue to fluctuate based on favorable or unfavorable news. Looking ahead, it is predicted that MCX Copper prices will range between Rs.713-730/kg.