COPPER

FUNDAMENTALS

Copper prices were seen mostly volatile with firm bias during Wednesday session. LME remained closed Wednesday and copper obtained a push up from weakness in the US dollar against the Euro, gains in crude oil prices and firmness in the US equity markets. Copper prices were most supported by China’s Ministry of Finance announcement to abolish import duty on copper cathode and anode from January 1. The current import duty on copper cathode and anode is 2%. China earlier on Oct 1, 2006 allowed duty free import of copper from Chile, the world’s biggest copper producer.

The General Administration of Customs of China recently disclosed China’s November refined copper imports rose 56% on year to 103,410 mt and its January-November imports increased 89% on year to 1.38 million mt.

Copper prices may continue firm on chances of increased buying from China in the near term particularly looking at reducing SHFE warehouse copper supplies. Copper prices may seek directional cues from LME that reopens Thursday after an extended weekend due to 3 days Christmas holidays.

TECHNICALS

Copper chart is showing prices have rebound from lows. Candlestick pattern is showing indecision. Prices have closed far above short as well as medium term EMA’s showing firmness. MACD is rising in negative zone showing decreasing bearish momentum. Stochastic Oscillator’s bearish crossover in overbought region is warranting caution to the bulls though RSI’s upward move in neutral region is indicating firmness. Copper may trade volatile with firm bias during the session.

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