News from China on declining copper production affects the price of red metal.
Chinese companies cut the production of copper. Usually, spring is the season of peak demand, but sales fall short of expectations due to a slow recovery in domestic consumption and sluggish exports.
China is the world's largest consumer of copper, and the slowing demand in this country, coupled with fears of a global recession, puts on metal prices. Copper quotations have fallen to a one-month low this week on the London and Shanghai stock exchanges.
At the industry conference Shanghai Metals Market (SMM), representatives from six Chinese copper producers told Reuters about the decreased number of orders in the second quarter compared to last year. That forced companies to reduce prices for their products and even sell them at a loss.
The reduction of copper products may adjust the SMM forecast, according to which copper consumption in China in 2023 will grow by 2.4% to 14.12 million tons compared to last year. According to the National Bureau of Statistics, in the first quarter, the output of finished copper products rose by 7.8% to 5.21 million tons compared to the year before.
The decline in copper production in the Celestial Empire was caused by weak demand. Copper prices may go down to a one-month low on this data.
The copper price is in a sideways correction with a range of 8435 - 9200 in the H4 timeframe.
The copper price has formed a downtrend on the hourly timeframe. As the price approaches the trend resistance, it may trigger a bounce toward the main support of 8435. Stochastic Oscillator indicators (standard values) signal that the price is in the overbought zone. The presence of an obstacle in the form of downward resistance and an overbought zone allows prices to pullback to the downside.
Signal:
Long-term prospects for copper are selling.
Target is at the level of 8420.
Part of the profit should be fixed around the level of 8710.
Stop-loss is around the level of 1915.00.
The bearish trend is long-term, so choose a trading volume of no more than 1% of your balance.
This content is for informational purposes only and is not intended to be investing advice.
