COPPER

HIGHLIGHTS OF THE WEEK:

·         LME warehouse copper stocks grew 3.03% to 186,425 mt at the end of the week from the beginning of the weeks 180,925 mt. Comex copper inventories (warranted & non-warranted) declined 604 st to 17981 st from previous weekends 18,585 st. SHFE copper stocks reduced by 12,027 mt to 44,855 mt.

·         International Copper Study Group disclosed world copper market in August was in a surplus of around 60,000 mt. However when adjusted seasonally the market came out to be in a deficit of 10,000 mt. 

·         China’s October copper production grew 42.5% on year to 358,000 mt. Its copper output during January-October rose 19% on year to 2.85 million mt, according to the National Bureau of Statistics of China.

·         Chile’s Codelco offered some Chinese customers 2008 refined copper premium of $110 per mt. Benchmark premium last year was $ 130-135 a mt.

·         Northern Chile was hit by another earthquake of a magnitude of 6.3, later no damages were reported.

·         General Administration of Customs of China revealed China’s refined copper imports in Oct rose 43.6% on year to 98,155 mt. Its total imports during January-October rose 92.3% on year to 1.28 million mt.

·         World Bureau of Metal Statistics revealed world copper market was in deficit of 334,000 mt during January-September from a surplus of 3000 mt in whole 2006 calendar year. In Sep refined copper production stood 1.457 million mt and consumption was 1.442 million mt.

MARKET COMMENTARY:

Copper continued to decline with slight recovery near the weekend.  The prices dipped following hefty and successive increase in LME warehouse copper inventories, sluggish demand from Asian countries, increasing copper output of China, concerns about global economy’s health and re emergence of credit market issues. MCX November copper futures prices fell by Rs 23.65 from Rs 275.3 to 251.65 per Kg. 

FUNDAMENTAL OUTLOOK:

Copper prices may try to recover a bit on dollars persistent weakness and chances of another interest rate cut by the Federal Reserve in its upcoming meeting. 

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