Copper On MCX Settled Up 0.69% At 366.30

Copper on MCX settled up 0.69% at 366.30 on short covering as prices recovered from last weeks low after centrist Emmanuel Macron’s victory in the first round of the French presidential election boosted investors’ appetite for riskier assets. After the recent copper price surge, market participants will be closely watching the second round of the French election on May 7, as it could lead to another copper relief rally. Also Rio Tinto the world’s second largest miner, recently reported that copper output dropped in the first quarter of the year due to a historically long strike at its 30 percent-owned Escondida mine in Chile and Indonesian regulatory changes that affected its Grasberg mine output, a joint venture with Freeport McMoRan.

The major supply disruptions seen at the beginning of this year have abated for now and were mitigated to a great extent by increased scrap availability. While in the absence of further disruptions market still see the global copper market in surplus this year and indeed a larger one next year as more new projects are commissioned and idled capacity restarts, adding that demand growth is reasonable, but not sufficient to offset this surplus. Also sentiment generated inevitably has faltered for now, as the market focuses on more copper-specific data, such as disappointing import data out of China.
Technically market is under short covering as market has witnessed drop in open interest by -8.74% to settled at 14887 while prices up 2.5 rupees, now Copper is getting support at 364.3 and below same could see a test of 362.2 level, And resistance is now likely to be seen at 367.9, a move above could see prices testing 369.4.

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Suhani Verma

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