Copper Hits 11-Month High on Supply Concerns
Copper Analysis
Top China copper smelters have jointly agreed to cut production levels according to Reuters and the news sent prices to the highest levels in nearly a year [1]. Although no specific figures were announced, the report comes at a period of broader supply concerns.
Anglo American for example, one of the world's biggest miners, expects production to drop around 4% this year [2]. First Quantum forecasts a more than 40% decrease [3] and has halted production in its biggest site (Cobre Panama), due to court ruling [4]. On the demand side, the clean energy transition and prospects of a recovery in the chip industry due to AI, can put upwards pressure.
Having hit the highest point in eleven months, Copper now has 4.196 in its crosshair, but we remain cautious around further gains. With RSI at overbought conditions, a pullback would be reasonable.
However, daily closes below the EMA200 (at around 3.860) that would halt the bullish momentum, would need a strong catalyst. Chinese miners may have agreed to output cuts, but demand may sag, as the economic recovery has been uneven and the property sector remains in distress.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
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