Copper prices eased on Tuesday under pressure from a slowdown in China’s export growth and a stronger dollar while the market awaits more clues on China’s 2025 key targets.
Three-month copper CMCU3 on the London Metal Exchange (LME) was down 0.1% at $9,218 a metric ton. The contract closed at its highest in nearly a month on Monday after top metals consumer China said it would take more action to boost its economy. MCX Copper settled at 830.65 almost flat.
For copper, used in power and construction, this support faded on Tuesday as data showed that China’s total exports growth missed expectations, imports unexpectedly shrank in November while concern over prospects for China’s construction sector persists.
The focus is now on China’s Central Economic Work Conference meeting this week for more clarity on the next year’s key targets and potential economy stimulus measures.
China’s November copper imports, however, hit a one-year high, customs data showed, supported by restocking amid expanding manufacturing activity and lower prices for the metal.
The U.S. currency strengthened, making dollar-priced metals less attractive for buyers holding other currencies, as traders looked ahead to a U.S. inflation reading on Wednesday for further clues on the pace of Federal Reserve easing.
The U.S. dollar remained steady against major currencies and touched its strongest level this month against the yen, as traders awaited a key U.S. inflation report on Wednesday for insights into the Federal Reserve’s policy outlook. A stronger dollar makes dollar-priced metals more expensive for holders of other currencies, dampening demand.
China’s November export growth slowed compared to the previous month, while imports unexpectedly contracted, highlighting challenges for the world’s second-largest economy. The looming return of Donald Trump to the White House has added fresh trade uncertainties.
Despite broader economic concerns, China’s copper imports rose to a one-year high in November, driven by increased shipments from Africa and restocking efforts to replenish domestic inventories.
China’s exports of rare earth minerals fell by 7.1% in November compared to October, according to customs data, as overseas restocking ahead of Christmas holiday production tapered off. The country shipped 4,416 metric tons of rare earths in November, down from 4,753 tons in October and 4,205.8 tons in November 2023.
For the first 11 months of 2024, cumulative rare earth exports rose 6.6% year-on-year to 52,105 tons. However, imports of rare earths fell 20.9% in November compared to the same period last year, totaling 11,327 tons. From January to November, imports dropped 22.7% year-on-year to 123,288 tons.
Today, the US CPI and Canada’s policy decisions are likely to drive price movements.
Technical View of Copper Prices Drop
Copper prices retreated from the day’s high and settled at 830.65, down 0.05%.
Intraday price action resulted in a formation of a doji candlestick which is indicating for an decisiveness’ in a near future. Although, prices trading above the key support level 815 since last week, which suggest strength to be continued.
Any dip till 825-822 is expect to attract buyer for the upside target 835-842.00
On the downside, support is seen at 815.00 below it may drop till 810-807.50.
Further, a higher US CPI readings may add some pressure or vice a versa.
Until then, Happy Trading!
Commodity Samachar Securities
We Decode the Language of the Markets
Also Read: Your Essential Forex Newsletter for Profitable Trades
Recommended Read: 2024 G20 Summit: Did It Deliver on Market Expectations?
Want Help On Your Trades ?
Chat with us