Copper Higher Amidst Weak Output Concerns
Copper Higher on Monday
Copper prices are starting the week on a firmer footing as weaker oil prices and renewed focus on supply disruptions in the market keep demand firm. Two mine workers were killed during an avalanche on Sunday at Codelco’s El Teniente mine where operations are due to be suspended now for longer having already been paused due to extreme weather conditions. This comes amidst news of a strike at Antofagasta’s Centinela mine which is expected further weigh on national output this month. Last week, data showed that output from Chile has fallen to its lowest levels in almost two decades amidst ongoing strikes and mine closures due to repair and weather events. With this backdrop set to continue near-term, prices should remain underpinned, especially while lower oil prices are boosting demand further at the same time.
AI & Electric Vehicle Demand
In terms of demand drivers, the ongoing boost from the AI sector remains a big focus. A surge in data centre building, semi-conductor development and battery developments continues to drive demand for copper. Additionally, strong appetite from the electric vehicle sector is also driving buying. With these two sectors widely expected to continue to grow in coming months/years, faltering supply levels mean the near-term outlook remains firmly bullish for copper.
Technical Views
Copper
Copper prices continue to battle around the 6.7190 level following the latest correction lower from highs just ahead of the 7.0000 level. Softer momentum studies readings reflect the lack of directional action recently, suggesting risks of a further correction lower. If we do slip back from here, 6.3750 is the next big support level to watch.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.