OfBusiness Copper Dailies | 19th July 2023

Price

• LME copper prices closed at $8,466/MT on Tuesday, down by 0.31%. Today, LME Copper is trading at $8429/MT, down by 0.51%.
• The SHFE 2307 Copper contract was settled at 68,430 yuan/MT. SHFE 2307 copper is trading at 68,470 Yuan/MT, up by 0.06%.
• MCX copper prices closed at Rs. 724.95/Kg, down by 0.17%, MCX July Copper is trading at Rs.722.80/Kg, down by 0.27%.

Demand and Supply

• Demand will remain muted as long as copper prices are high because the accumulation of inventory has made it difficult for holders to uphold pricing confidence.
• LME stockpiles have further increased, showing the easing of demand globally. China’s near-term demand is projected to be weak, resulting in an increase in copper stocks in SHFE warehouses.
• The current LME Copper warehouse inventory is 59,200 MT. The SHFE Copper warehouse has 27,589 MT of stock.

News

• Chile’s Codelco was the world’s largest copper mining company in Q1 2023 (based on attributable copper tons), followed by Freeport-McMoRan and BHP. The top 10 copper producers mined 2,209 MT of copper in Q1 2023, down 3% compared to Q1 2022. Production at the Chilean mining giant Codelco, the world’s largest copper mining company, decreased 9% Y-o-Y to 352 Thousand MT in Q1 2023 compared to 387 Thousand MT in Q1 2022.
• Rio Tinto warns of global slowdown risks and production issues. Rio downgraded its expectations for refined copper production and output at its ore operations and warned of rising costs. Rio cut its refined copper guidance by about 10% to 160,000 to 190,000 MT and raised its cost guidance due to a smelter rebuild at its Kennecott operations in Utah that has also been delayed by a month.
• Copper falls as weak China’s growth worsens the demand outlook. Copper has come under pressure at the start of the week following China’s second-quarter gross domestic product data, which came in below expectations, adding to concerns over the health of the Chinese economy.

OFB’s Opinion

• In terms of pricing, an increase in the price in the immediate future is unlikely because the markets are still waiting for new stimulus programmes from China’s government in response to weak industrial data. MCX is encountering resistance at Rs. 730/Kg and is predicted to range from Rs. 719-727/Kg.