Copper futures gain 1.64% to Rs 717.95 per kg on falling mines supply, firm demand



Copper prices climbed to Rs 717.95 per kg on April 15 as participants increased their long positions as seen by the open interest. The base metal extended gain in the evening session after a gap-up start to trade at day’s high tracking firm global trend and subdued dollar.

The non-ferrous metal has been trading higher than 5, 20, 50, 100 and 200 days’ moving averages on the daily chart. The Relative Strength Index (RSI) is at 67.65 which indicates bullish momentum in prices.

Industrial metals resume their upward march after a couple of days of correction. Copper rallied on expectation on increasing demand and likely low supply to drive price higher.

Supply worries arising from major copper producing nations amid a weaker US Dollar has painted a favourable picture for the red metal prices. However, a persistent rise in the Copper Inventories in the LME monitored warehouses kept the prices in check.

“The spot treatment charges for copper plummeting below the global break-even point is a clear indicator of falling mine supply. Moreover, many Chinese smelters scheduling to go under maintenance due to low refining fee’s can be a severe threat to the global Copper supply chain”, said Yash Sawant, Research Associate, Angel Broking Ltd.

He said that with falling domestic output, China’s imports of industrial metals are expected to remain elevated in the coming months.

“Global investors shunned the Dollar as the US Federal Reserve maintained its dovish approach and vowed to keep interest rates low for some time. Also, retreating Treasury yields pushed the U.S. currency to a multi-week low versus major peers making the Dollar prices metals more attractive”, Sawant noted.

The US dollar trades weaker at 91.58, down 0.10 percent in the evening session against the rival currencies.

MCX METLDEX increased 130 points, or 0.90 percent, at 14,594 at 19:37. The index tracks the real-time performance of key base metals.

In the futures market, copper for April delivery touched an intraday high of Rs 718.35 and a low of Rs 702.20 per kg on the MCX. So far in the current series, the base metal has touched a low of Rs 657.85 and a high of Rs 732.70.

Copper delivery for April soared Rs 11.60, or 1.64 percent, to Rs 717.95 per kg at 19:41 hours with a business turnover of 3,726 lots. The same for May contract edged higher Rs 11.40, or 1.61 percent to Rs 718.75 per kg with a turnover of 599 lots.

The value of April and May’s contracts traded so far is Rs 1,544.88 crore and Rs 75.61 crore, respectively.

MCX Copper is likely to trade with positive bias for the session with supports placed at Rs 709-704 whereas resistance is at Rs 716-50-719, said Motilal Oswal. The brokerage firm advised its clients to buy on dip for the short term.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “MCX Copper is trading with bullish momentum and prices breached the resistance of Rs 694-697 levels in the previous session and has been on a rising spree. The market is trading above Rs 710 levels for the first time in more than a month.”

We may expect a marginal decline in prices in the upcoming session, which could act as a buying opportunity for the investors, Purohit added.

At 1417 (GMT), the red metal price rose 2.31 percent, quoting at $ 9,293.25 per tonne in London.

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