Copper – Weekly Wrap – October 9, 2021 – M. Sriram Iyer, Senior Research Analyst at Reliance Securities

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Copper prices rebounded this week after surprisingly weak US employment data pushed the dollar lower.

The US economy created 194,000 jobs last month, the fewest jobs in nine months, compared to a consensus forecast of 500,000 jobs.

In addition, prices have also risen thanks to a rebound in global stock markets, declining foreign exchange stocks and the threat of a supply disruption at a mine in Peru.

Reuters reported that an indigenous community in the Peruvian province of Espinar blocked a key mining road this week and may consider continuing the blockade indefinitely, in protest against the government and the Glencore Antapaccay copper mine.

The conflict comes a day after the government defused a similar standoff in the nearby town of Chumbivilcas.

Meanwhile, stocks under warrant in LME-registered warehouses fell to 82,850 tonnes, from 168,075 tonnes on September 21. Shanghai Futures Exchange (ShFE) warehouse stocks at 43,525 are the lowest since 2009 and have given support.

OUTLOOK

In the future, copper could stay on the side.

The bankruptcy of a major Chinese real estate developer that has triggered debt concerns for the construction industry and a coal shortage that has cut off manufacturers’ electricity supplies will keep prices under pressure in the near term.

Additionally, markets could follow the economic calendar next week with full social financing, new yuan lending and M2 money supply expected from China.

Additionally, trade balance, CPI and PPI data from China will also be the main trigger for markets next week.

On the other hand, the longer term horizon remains bullish for the metal due to the strong demand for copper as part of the global energy transition from charging stations to solar power plants.

Technically, over the past 3 weeks LME copper has traded in a wide range of $ 9,000-9,500 and only one breakout on each side will provide markets with new ranges.

Nationally, the MCX Copper continuous contract remained in the 698-740 broadband and only one break on either side will provide markets with new ranges.

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