Copper On MCX Settled Up 1.7% At 377.15

Copper on MCX settled up 1.7% at 377.15 helped by concerns over supply from Chile, recent data pointing to robust import demand in China and falling stocks of the metal. Falling stocks of copper support the price. Copper inventories in LME warehouses fell 9,475 tonnes on Friday to 276,875 tonnes and are down almost 20 percent from a seven-month high May.

China reported stronger-than-anticipated exports and imports for May, despite falling commodity prices, indicating the economy is holding up better than expected despite rising lending rates and a cooling property market. Copper mines in global major copper producing regions Chile and Indonesia have suffered continuous strikes since the beginning of 2017, raising market concerns on copper supply.

However, according to China Customs, imported copper concentrate supply is ample in China’s market for now as the strikes make limited impact on copper supply actually. Workers at Freeport-McMoRan Inc’s Grasberg copper mine in Indonesia announced to launch strike in May, following a 43-day strike at Chilean Escondida copper mine. This raised market concerns on global copper supply.

According to China Customs, China copper concentrate imports registered first negative growth in February 2017 from September 2015, while those rallied 19.84% YoY to 163,200 tonnes in March and expanded further by 7.66% YoY in April. TCs for imported copper concentrates rebounded from April after a decrease in February, a sign of easing supply.

Technically market is under short covering as market has witnessed drop in open interest by -1.55% to settled at 16935 while prices up 6.3 rupees, now Copper is getting support at 372 and below same could see a test of 366.7 level, And resistance is now likely to be seen at 380, a move above could see prices testing 382.7.

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Suhani Verma

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