Copper prices pared earlier gains and turn flat in the evening session tracking subdued global cues despite upbeat industrial data from Euro and a softer US dollar. The base metal retreated after testing the resistance of Rs 773-777 during the morning session and traded below them.
Copper delivery for June slightly dipped Rs 0.20, or 0.03 percent, to Rs 768.65 per kg at 19:02 hours with a business turnover of 4,412 lots. The same for the July contract eased Rs 0.10, or 0.01 percent to Rs 772.50 per kg with a turnover of 2,339 lots.
The value of June and July’s contracts traded so far is Rs 1,860.32 crore and Rs 30.77 crore, respectively.
MCX METLDEX marginally rose 35 points, or 0.23 percent, at 15,335 at 19:04. The index tracks the real-time performance of key base metals.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “We may expect a dip in prices where Rs 767-765 levels may be tested on the downside in the evening session.”
Market players expect supply threat in Chile and massive US spending plans on infrastructure ignited worries of a possible shortage of metal in the global markets.
LME supplies for copper are in marginal deficit for the day which may strengthen the uptrend.
A strike by a union of remote operations workers at BHP’s Escondida and Spence copper mines in Chile continued over the weekend, with the company using replacement workers to ensure continued production.
The US dollar fell to 89.77, down 0.24 percent in the evening session against the rival currencies. The decline in the greenback makes Dollar-denominated industrial metals cheaper for other currency holders.
The non-ferrous metal has been trading higher than 5, 20, 50, 100 and 200 days’ simple moving averages and exponential moving average on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 57.18, which indicates a mildly bullish movement in prices.
At 1346 (GMT), the reddish-brown metal price rose 0.46 percent to quote at $ 10,322.25 per tonne in London.
Geojit Financial Services said, “Even though broad buying still point to higher, a corrective move which settles below the downside level of Rs 767.40 may drag price lower.”
MCX Copper has intraday support at Rs 762.50-758 whereas resistance is at Rs 773-776.50, said Motilal Oswal. The brokerage advised its clients to buy on dips near support is advised for the day.