FUNDAMENTALS

Copper traded volatile on Monday before ending slightly lower in PM Kerb session. Copper showed weakness initially and thereafter pared all its intra day losses before closing mildly weak.

Copper weakened following another hefty build up in LME warehouse copper stocks, modest demand and reports of increase in Peru’s August copper production.

LME warehouse copper inventories increased by 2,150 mt to build 151,100 mt Monday.

Macroeconomic factors including global economy’s concerns, credit market problems, sharp declines in equity markets Friday, steep fall in Euro against the dollar and correction in crude oil prices Monday were negative for copper. The prices tried to recover taking cues from gains in equities though fell again on lack of demand.

Peru’s copper production during August increased 28% on year to 109,130 mt, according to the Energy and Mines Ministry of Peru.

Hefty increase in LME stocks, moderate demand, credit market problems, along with correction in crude oil prices and dollars firmness may pressurize copper prices in the near term.

TECHNICALS

Candlestick pattern are showing indecision. The prices have closed below short & medium term EMA’s showing weakness in the market. MACD is falling in negative zone showing bearish momentum. Stochastic Oscillator has made a bullish crossover in oversold region indicating firmness. However RSI is falling in neutral region indicating weakness. Copper may trade volatile.    

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