Copper on MCX settled down -0.29% at 384.05 as concerns dropped after thestrike at the world's largest mine, Escondida in Chile, has ended. But at 43 days it was longer than expected and, factoring in a gradual ramp-up to full production, is going to translate into some 230,000-240,000 tonnes of lost output. While Global exchange stocks of copper have surged by around 167,000 tonnes so far this month to 750,000 tonnes, the highest level since mid-2013.
Sentiments remain weak for Copper after the update from GFMS that Copper disruption worries ease on Escondida strike end, around 220,000 tonnes of output has now been lost to strikes and disputes at copper mines in the year-to-date as per GFMS estimates. However, supply worries have eased as workers at the Escondida mine in Chile opted to return to work without a new contract.
The estimate, based on our assumptions for production at the affected operations during the quarter, equates to more than one-fifth of this year’s assumed 5% disruption allowance, which reduces the headroom in our base case forecast for any additional and as yet unknown disruptions during the balance of the year that could further peg back supply during the period.
Now Market watchers will also be watching U.S. economic reports, including figures on personal income and spending and appearances by a number of Fed officials. Technically market is under long liquidation as market has witnessed drop in open interest by -0.94% to settled at 11840 while prices down -1.1 rupees, now Copper is getting support at 382.3 and below same could see a test of 380.4 level, And resistance is now likely to be seen at 386, a move above could see prices testing 387.8.