Market and product
Copper unstoppable despite rising inventories
Copper stock at LME went up by 1.2 percent last week. Base metals at LME traded strong in Asian session on Monday. However, some profit booking may drag metals down in later sessions of the day but overall base metals are in uptrend and could rise further on investment demand.
LME 3 Month Copper last traded at USD 9910 a tonne. Copper prices are marching higher to cross its previous all time high near $ 10150 per tonne.
Copper prices are likely to be well supported after release of optimistic import data from China. China the major metal consumer is seen piling up inventories for its future demand. Investors are investing in metals particularly Copper on positive second quarter economic outlook.
While concern is that Crude prices are trading at higher levels of 112.5 USD per barrel which may bring higher inflationary situation in the world.
China may take liquidity tightening measures to tame inflation by doing further interest rate hike. Tight liquidity may reduce import demands in the coming months which may be a bearish signal for the industrial metals and mainly for Copper.
At MCX, the Indian commodity bourse, Copper April contract opened weak this morning at rupees 442 per kg made an intraday high at 443.5 against its previous close of 443.15. The said contract last traded at 439 down by 4.15 rupees.
The contract faces resistance near 452 and 468 while its support levels are seen at 425 and 410. In short term Copper prices may bounce but any rise could be a selling opportunity for positional traders.
Positional traders can sell MCX Copper April contract near 460 keeping a stop loss of 475 and can wait for the targets of 430-410 levels in the near future.
