Copper prices have been marginally up from the recent low of $9013 registered on June 21. At time of writing, prices were hovering around $9341, though still sharply lower from the recent high of $10746 registered on May 10.
Prices recovered after favorable comments from U.S. Federal Reserve Chair Jerome Powell, who reduced worries of a rate hike happening any time soon. Powell assured that the central bank's intent to encourage a "broad and inclusive" recovery of the job market and not to raise interest rates too quickly based only on the fear of coming inflation. Low interest rates for the longer term are likely to support economic recovery which increases industrial metals demand.
Another factor keeping Copper prices under pressure is the strength in the dollar index. The dollar index rallied from the recent low of 89.5 registered on May 25, and, at time of writing, was holding near 91.8; moderately up from yesterday's lows.
Anticipation of Chinese supply from reserved stocks entering the market is also being felt. China's state reserves administration said it would publicly auction a total of 100,000 tonnes of non-ferrous metals early next month in the first round.
Copper and zinc sales will take place on an online platform belonging to state-owned miner and metals trader China Minmetals Corp., which is likely to auction 20,000 tonnes of copper, 30,000 tonnes of zinc, and 50,000 tonnes of aluminum on July 5 and July 6.
US economic data was better-than-expected which is a positive for industrial metals demand and copper prices. US May's existing home sales fell -0.9% m/m to 5.80 million, stronger than expectations of 5.73 million. Also, the Jun Richmond Fed manufacturing survey current conditions rose +4 to an 8-month high of 22, stronger than expectations of no change at 18.
On the inventory front, LME Copper warehouse stock now stands at 160950 mt as of June 22 which has increased by 34275 mt in the last 30 days. Meanwhile SHFE Copper warehouse stock now stands at 107576mt as of June 22 which has dropped by 55783 mt in the last 30 days.
Copper prices are likely to remain negative while below the key resistance level of $9530-$9674. Meanwhile, the immediate support level could be seen around $9073-$8990.