Copper settled flat as prices remained under pressure on surging inventories and signs of weak demand in China. Inventories of copper tracked by the LME have surged 25 percent over the past four days to the highest since November. According to preliminary ICSG data, copper production and usage data indicates that the refined copper market ended in a production deficit of around 222,000 metric tonnes. The refined copper market balance for the month of May `16 showed an apparent production deficit of nearly 65,000 metric tonnes. In Q1, China's copper imports were running at record levels but for the past few months, figures appear smaller. In July, China imported 360,000 mt of unwrought copper and copper products. Arrivals of metal have totaled 73,325 tonnes last week, lifting headline exchange inventory to 271,575 tonnes, the highest level since October last year. Customs data shows exports of 89,000 tonnes to Singapore and 76,000 tonnes to South Korea since March, when China's exports first started accelerating. Between them Singapore and South Korea have accounted for almost 60 percent of all outbound flows. WBMS data showed global copper supply deficit expanded in H1 2016 and consumption grew faster than supply. According to the WBMS, global copper market was in a supply deficit of 197,000 tons in H1 2016, expanding from a deficit of 48,000 tons during January-May, a sharp reversal from the surplus of 372,000 tons in 2015. Technically market is under short covering as market has witnessed drop in open interest by -4.46% to settled at 28015 while prices up 0.2 rupee, now Copper is getting support at 306.3 and below same could see a test of 304.6 level, And resistance is now likely to be seen at 310, a move above could see prices testing 312.

Trading Ideas:

Copper trading range for the day is 304.6-312.

Copper settled flat as prices remained under pressure on surging inventories and signs of weak demand in China

Inventories of copper tracked by the LME have surged 25 percent over the past four days to the highest since November.

China cut copper imports for a fourth month to the lowest level in 17 months.