COPPER

FUNDAMENTALS

MCX copper gained during Saturday’s short session extending gains observed at the LME Friday. MCX February expiry copper futures contract ended Rs 1.40 up at Rs 272.70 a Kg after opening firm at Rs 271.75 and thereafter traded in the range of Rs 271.75-273.00.

Copper gained on Friday after SHFE warehouse weekly report disclosed the exchange’s copper stocks fell significantly lower. Moreover year-end trading resulted in short covering. Also dollars weakness, gains in crude oil prices, heavy profits in equities helped push copper up.

China is expected to purchase as its inventories have started dipping and copper prices are already at substantially reduced levels. Though US economic health’s concerns still prevail but a series of better than expected US economic data released this week mildly eased them.

The General Administration of Customs of China has revealed China’s November refined copper imports rose 56% on year to 103,410 mt. Its refined copper imports during January-November increased 89% on year to 1.38 million mt.

Moreover ICSG & WBMS recently stated copper markets deficit. ICSG showed a deficit of 265,000 mt during Jan-Sep against same period last year’s 21,000 mt surplus. WBMS disclosed a deficit of 207,000 mt during Jan-Oct.

TECHNICALS

Copper chart is displaying prices have rebound from lows. Prices have closed above short and medium term EMA’s showing firmness. MACD is rising in negative zone showing decreasing bearish momentum. Stochastic is moving upwards in overbought region though RSI is rising in neutral region giving room for further upside movement. Copper may trade volatile with firm bias.

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