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COPPER: Supply-demand Weakness Is Emerging with the Market Retreating After Surging

Commodity
Summary:

In the short and medium term, optimistic macro expectations support nonferrous prices, but the pace of accumulation accelerated or limit the further upward height.

Sell COPPER
EXP
TRADING

9300.000

ENTRY PRICE

8200.000

TGT PRICE

9600.000

SL PRICE

9253.645 -1.700 -0.01%

0

Point

Flat

8200.000

TGT PRICE

CLOSING

9300.000

ENTRY PRICE

9600.000

SL PRICE

Fundamentals

According to Foreign News on January 18, Chilean miner Antofagasta's 2022 copper output fell 10.4% due to lower ore grades and a historic drought in Chile. 2022 copper production of 646,200 tonnes was at the low end of the forecast range of 640-660,000 tonnes. Annual copper production will increase to 670-710 thousand tonnes in 2023.
According to Foreign News on January 17, First Quantum produced 776,000 tonnes of copper in 2022, down 5% from 2021. Cobre Panama produced a record 350,000 tonnes a year, while Sentinel grew to 242,000 tonnes a year on year. Kansanshi production was 146,000 tonnes, lower than in 2021 due to lower grades. Copper production is expected to grow to 775,000-865,000 tonnes by 2025.
Overall, on the macro level, the U.S. Consumer Price Index (CPI) in December was in line with expectations, the dollar index remains weak, and the yuan continues to appreciate. Domestic pandemic prevention and control set adjustment, the government is still introducing policies to boost the economy, and investors are optimistic about the expectation of domestic economic recovery. In terms of supply and demand, domestic non-ferrous consumption is weak, the supply is maintained at a high level, and the overall supply and demand are toward the direction of easing. In the short and medium term, optimistic macro expectations support nonferrous prices, but the pace of accumulation accelerated or limit the further upward height. In the long term, overseas macro expectations are more pessimistic, and non-ferrous metal prices still have the possibility of bottoming out.

Technical Analysis

In the daily chart, the market on January 5 rises from nearly 8200 to a high level near 9550, up nearly 1350 points or nearly 17%. Driven by the current sentiment, copper prices have seen six consecutive long white bodies. However, following a long upper shadow candlestick on January 18, the rounding top pattern is obvious, and the market began to turn weak. Considering that the current price is near the upper edge of the box and the Moving Average Convergence and Divergence (MACD) indicator is still in the overbought area, it is recommended to beware of a sustained retracement of copper prices.COPPER: Supply-demand Weakness Is Emerging with the Market Retreating After Surging_1

Trading Recommendations

Trade direction: Short
Entry price: 9300
Target price: 8200
Stop loss: 9600
Support: 9000, 8600
Resistance: 9550, 9700
Risk Warnings and Investment Disclaimers
You understand and acknowledge that there is a high degree of risk involved in trading with strategies. Following any strategies or investment methodologies is the potential for loss. The content on the site is being provided by our contributors and analysts for information purposes only. You alone are solely responsible for determining whether any trading assets, or securities, or signal, or any other product is suitable for you based on your investment objectives and financial situation.

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Focus on

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