On the macro front, the market kept close attention to the central bank meeting in Jackson Hole last week. Before the meeting, a number of Fed officials made hawkish remarks, which led the market to agree that Powell will deliver a hawkish message in his upcoming speech. The US dollar remained strong last week, and yields of US treasury bonds rose rapidly. However Copper remained broadly supportive on tighter fundamentals persisting in the metal.

On the fundamentals, low inventories at China and abroad strongly supported copper prices. The proportion of cancelled warrants of LME copper rose to 48.06%, and the backwardation structure of LME cash-to-three-month spread showed an expanding trend. The pressure of extremely low domestic inventories eased slightly last week because the imported copper flowed into the domestic market and the processing enterprises slowed down their purchasing rhythm in fear of high prices.

On a monthly basis however is set to end at relatively 8 % up being the second best performer after Zinc. China stepped up its economic stimulus with a further 1 trillion Yuan ($146 billion) of measures to bolster growth and curb the fallout of repeated Covid lockdowns and the crisis in the property market which also supported the metal last week.

Outlook for the week: China supply disruptions; Dollar movements in focus

Base metals were supportive last week may loose its shine this week, as continued dollar strength could limit any sharp upside.

A searing heat wave in China which  caused power shortages and impacted operations at metal plants, boosting fears of supply disruptions especially for Copper amid an energy crisis that?s already hit European output for Zinc & Aluminium, have started to fade this week ­­

In China’s southwestern province of Sichuan, most power supplies for industrial users are starting to be restored following two weeks of constraints amid a drought-driven electricity crunch. That may ease disruptions to metals production, including Copper & Aluminum.

Overall MCX Copper may decline in the initial half of the week to around Rs. 655 – 660 / Kg. while could continue to trade in the range of Rs. 660 ? 685 / Kg. for the week.