Last week, base metals traded in range and closed at negative side as increased inventories coincided with sluggish demand. But the downside side was limited as the weaker dollar as per the release of US inflation data heightened expectations that the Federal Reserve may soon cut interest rates.
China’s data on Friday showed total imports unexpectedly shrank and hit a four-month low in June, while unwrought copper imports declined to a 14-month low. The annual growth of outstanding total social financing (TSF), a measure of credit and liquidity in the Chinese economy, slowed to a record low. alongside an 8.6% increase in exports.
Copper: This week Copper prices market might remain volatile due to negative data from China and optimism about China’s potential stimulus. The war uses many tonnes of copper daily, and after the war, Ukraine will have a new mine from all that copper scrap, according to Fastmarkets. Additionally, Indonesia will likely stop exporting copper concentrate from December to boost domestic value addition. Attention will be on the Third Plenum meeting in mid-July. However, gains might be limited by a bleak physical demand outlook from China, where the prolonged property crisis and high inventories persist. This week, MCX copper prices may find strong support near the Rs. 835/818 level, while Rs. 885/915 may act as strong resistance.
Aluminum: Aluminum prices face a range of 218-235 amid rising hopes for a US Fed rate cut. The upcoming 20th Third Plenary Session in China could offer positive developments. However, market uncertainty looms due to recent attacks on Trump and the Israel-Palestine conflict. Rising inventories and seasonal demand tapering may cap price increases.
Zinc: Zinc prices hold a slightly positive outlook, as Operations halted at MMG Ltd’s Dugald River zinc mine in Australia for repairs have tightened supply, alongside reduced zinc concentrate treatment charges (TC). Despite these factors, seasonal consumption fluctuations persist, influencing price volatility amid ongoing risks from adverse Chinese data. This week, MCX zinc prices may find strong support near the Rs. 868/861 level, while Rs. 885/903 may act as strong resistance.
