COPPER

HIGHLIGHTS OF THE WEEK:

·         LME Copper inventories built by 3450 mt to 179,650 mt at the weekend from 176,200 mt at the start week. However, SHFE stocks drew down by 2326 mt to 56,882 mt during the week. Comex copper stocks (warranted & non-warranted) fell 363 st to 18,585 st from prior weekends 18,948 st.

·         General Administration of Customs of China’s preliminary data showed China’s October copper & products imports fell 5.64% on month to 204,424 mt from 216,643 mt. Copper & copper product imports in January-October rose 38.8% on year to 2.33 million mt. Its October scrap copper imports totaled 495,052 mt. Scrap copper imports during first ten months rose 16% on year to 4,548,152 mt. 

·         India’s copper output during Q1, FY 2007-08 rose 20% on year to 347,703 mt from prior 289,754 mt

·         Kazakhstan’s refined copper output during January-October fell 6.5% on year to 325,377 mt.

·         Peru’s Energy and Mines Ministry stated Peru's copper output in Sept rose 22% on year to 104,257 mt as copper miner Sociedad Minera Cerro Verde increased output adopting a modernization program.

·         Chile the world’s biggest copper producer was hit by a powerful earthquake resulting in production stoppage at some of the Chilean copper mines. BHP’s Escondida, Spence and Cerro Colorado mines faced power cuts. Though later it was known that Chile’s mining sector did not suffer any major output disruptions. BHP Billiton and Codelco soon announced mining operations were almost back to normal.

·         Chile’s Codelco reduced the premium it will charge from Chinese buyers on refined copper in 2008 by around 26% to $99 a mt. For the year 2007 benchmark premium was $ 130-135 a mt.

·         Central Bank of Zambia stated Zambian copper output fell 4.5% on year to 365,603 mt during first nine months. Exports in same period fell 336,794 mt from 368,883 mt in January - September 2006.

·         Chile’s Central Bank disclosed Chile’s October copper exports rose 54% on year to $ 3.96 billion.

MARKET COMMENTARY:

Copper was extremely volatile during the week amid a series of price supportive and opposing factors.  US economy’s slowdown and slight correction in crude prices weakened copper. Though, copper spiked higher on fear of supply disruptions from an earthquake in Chile.  SHFE’s stock report showed a fall in this week’s stock thus supported copper. MCX Nov copper futures traded between Rs 264.2 - 287.95 a Kg. 

FUNDAMENTAL OUTLOOK:

Copper may consolidate and thereafter turn weak again on concerns over health of global economy.

Click here to download full report

Reliance Money Disclaimer