Copper on MCX settled up 0.25% at 387.75 supported by a softer dollar and ongoing mine supply concerns. Striking workers at BHP Billiton's Escondida copper mine in Chile, are blocking attempts by the company to renew operations at a key port nearby, BHP and an umbrella union said on Thursday, as the stoppage enters its sixth week.
Copper prices support from a declining US dollar as traders shrugged off the Fed’s decision to hike rates and instead focused on the fact that the Fed is unlikely to accelerate its pace of future rate hikes. The Fed maintained its outlook for two additional rate hikes this year and three more in 2018, but did not mention any further rate hikes. Yellen also added that the rate hikes would be “gradual”. This sent a rally in US equities while it caused the US dollar to pullback in copper.
Meanwhile, after the Fed four Gulf countries hiked their rates as well given that their currencies are pegged to the dollar and China’s PBOC raised rates by 10 basis points on both its medium-term lending facility loans and on repos. Meanwhile, there are no new updates on what is really driving copper prices these days, the supply disruptions. According to Goldman Sachs commodities research, roughly 200,000 tons of copper production has already been lost due to the production disruptions. Goldman Sachs sees copper prices climbing to $6,200 over the next three months.
Data released overnight from China showed that copper output increased 6.7% in the Jan-Feb 2017 period versus the same period in 2016. Now technically market is getting support at 386.1 and below same could see a test of 384.5 level, And resistance is now likely to be seen at 390.2, a move above could see prices testing 392.7.