The price of copper rose sharply from the weekly bottom and settled on a moderate rise. This was the highest level since early August. On a monthly basis, prices rose 2.09% on supply concerns and hopes of increased demand. At the same time, sentiment was also supported by the weakness of the US dollar.
Panama plans to shut down First Quantum Minerals Ltd’s Cobre operations. after a domestic court ruled that a law approving the mine’s new multi-decade operating contract was unconstitutional. The move is aimed at reducing copper supply and threatening a global surplus projected for 2024, as the company produces about 1.5% of the world’s supply.
Meanwhile, China’s Caixin Manufacturing PMI rose unexpectedly in November, raising hopes that the country’s manufacturing sector is finally recovering.
Beijing has set a target of 1 trillion yuan for manufacturing and infrastructure development, while the prospect that major central banks, particularly the Fed, will cut interest rates next year has also boosted copper’s outlook.
Apart from that, real estate was the only bright spot in the Chinese market on Monday after the debt developer China Evergrande Group got an extension on a ruling against the company. A Hong Kong court delayed the company’s liquidation request until the end of January, giving the developer more time to finalize a reorganization proposal with debtors.
In addition, China’s economic indicators are scheduled to be released, especially November trade data and inflation indicators, which will have a strong impact on prices.
Technical Outlook
As of November 13, 2023, copper prices have turned positive. Prices rose more than 4% from a low of 696.00 to a recent high of 727.00. Last week’s prices closed at 726.60, compared to 722.30 the previous week.
In the chart above, prices have produced a strong bullish flag pattern, indicating bullish concern in the near term. Now, any short-term break to 718.00-716.00 is likely to attract buying activity in the near term.
Alternatively, on the downside, decisive support can be seen at 709.50, a break below which could pull to 700-692.00. Traders can trade on long side with a stop loss close below 709.50.
Commodity Samachar
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