Copper On MCX Settled Up 0.14% At 366.80

Copper on MCX settled up 0.14% at 366.80 as the U.S. dollar lost ground against the euro in the wake of the French election, making commodities more affordable for buyers paying with other currencies. While today prices may see range bound trading as markets were underwhelmed by the Trump administration's proposed tax cuts and as focus shifted to China manufacturing, where growth is expected to slow in April. Meanwhile the biggest copper producers are sounding the alarm on mounting supply troubles.

BHP Billiton lowered its estimates on Wednesday for full-year output by as much as 18%. Freeport-McMoRan slashed its estimate for 2017 sales by 90,718 tonnes, adding to what Citigroup described as "structural tailwinds" that support its outlook for higher prices. Copper has gained 3.2 per cent in London this year, compared with 16 per cent for aluminium, even after the six-week strike at BHP's Escondida mine labour and weather interruptions in Peru and Indonesian government restrictions on shipments from Freeport's Grasberg site curtailed supply.

Copper prices have, overall, staged a good performance so far this year due to supply disruptions. According to the ICSG, world mine copper production jumped by 5.3%, or 1 million tons to 20.16 million tons in 2016 due mostly to a large increase in concentrate output from Peru. Earlier in the year, the ICSG said it expects a supply surplus of around 160,000 metric tons in 2017 – but, this figure may need a revision following the supply disruptions that plagued the market earlier in the year. Now technically market is getting support at 364.6 and below same could see a test of 362.5 level, And resistance is now likely to be seen at 368, a move above could see prices testing 369.3. 

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Suhani Verma

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