Copper prices continued downward momentum and fell below $ 10,000/tonne as investors turned cautious in the metals space and the dollar rebounded after touching four-month low. The base metal traded weaker amid top consumer China’s efforts to curb raw material prices.
The non-ferrous metal extended decline to trade at day’s low in the evening session on negative global cues.
Copper delivery for May slipped Rs 14, or 1.86 percent, to Rs 738.15 per kg at 20:46 hours with a business turnover of 3,287 lots. The same for June contract declined Rs 13.60, or 1.80 percent to Rs 743.70 per kg with a turnover of 2,339 lots.
The value of May and June’s contracts traded so far is Rs 3,506.04 crore and Rs 838.85 crore, respectively.
MCX METLDEX plunged 174 points, or 1.17 percent, at 14,729 at 20:48. The index tracks the real-time performance of key base metals.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “MCX Copper has been trading with negative bias and price breached major support of Rs 753- Rs 749 levels and are trading below them. A marginal correction against the current downtrend or a pullback could be witnessed in the evening session after which bears may continue to dominate.”
LME supplies for copper are in surplus for the day which may support the bearish move.
China said it would improve commodity supply and demand management to prevent unreasonable price rises.
The union representing workers at Chile’s Escondida copper mine, the world’s largest, said it was preparing for a lengthy strike if owner BHP did not reach a fair and equitable deal in looming contract talks.
The rebound in economic activity has led to inflationary concerns which in turn fan worries that central banks may be forced to pullback
The US dollar recovered at 89.96, up 0.19 percent in the evening session against the rival currencies.
The non-ferrous metal has been trading higher than 50, 100 and 200 days’ moving averages but lower than the 5 and 20 days’ moving average on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 43.19, which indicates bearish movement in prices.
At 15:30 (GMT), the reddish-brown metal price fell 1.29 percent to quote at $ 9,879.75 per tonne in London.
MCX Copper price is expected to trade in a bullish trend with support at Rs 744 level and intermediate support at Rs 747 level, said Motilal Oswal. The brokerage advised its clients to buy on dips targeting higher resistances at Rs 752- Rs 755 zone.
Axis Securities advised its clients to buy May Copper at Rs 750 with a stop loss at Rs 745 and a target of Rs 756.
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