Copper price is correcting in a wide range

02 May 2023 155
Copper price is correcting in a wide range

The news from Chile, the world’s largest copper producer, has an impact on the red metal pricing.


According to Chile's National Institute of Statistics (INE), the industrial production index decreased by 5.9% in March compared to the same period last year. The decline was caused by reduced production in Chile's mining and manufacturing sectors.


INE reports the 8.7% year-on-year decline in Chile's mining production in March 2023. The fall is majorly driven by the lower activity registered in the country's metallic mining subsector (-8.9%). The red metal’s production and processing in the country was down from 462,360 tons in March 2022 to 440,389 tons in the same month this year. This means the 4.8% decline in copper production.


Chile's manufacturing production index decreased by 5.5% year-on-year in March 2023 due to reduced manufacturing of chemical substances and products.


INE also reported a 2.3% rise in the electricity, gas and water production index in March 2023 compared to March 2022. The improvement was driven by an increase in electricity generation.


Reduced copper production might lead to increased demand for the metal and higher prices. In addition, lower production in the manufacturing sector could result in reduced copper consumption, which might also affect demand.


The U.S. ISM Manufacturing Purchasing Managers Index (PMI) for April managed to increase from the lowest of 46.3 recorded in May 2022 to 47.1 on Monday. The index rise suggests increased demand for industrial metals and, consequently, supports the red metal price.


The copper price on the daily timeframe formed a flat corridor within a range of 8,430–9,200. The metal pulled back from the support level of 8,430, indicating the price movement towards the opposite range limit.

Copper price is correcting in a wide range - Photo 1


The price is in formation of the third ascending wave on the M15 timeframe. The break through the top of the first wave at 8,628 will strengthen the uptrend.


Signal:

The short-term outlook for copper suggests buying

The target is at the level of 8,810.

Part of the profit should be taken near the level of 8,628.

The Stop-loss is at the level of 8,445.

Bullish trend is of short-term nature, so it is worth selecting the trading volume of not more than 2% of your balance.


This content is for informational purposes only and is not intended to be investing advice.

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