Technically Copper market is under long liquidation as market has witnessed drop in open interest by 18.17% to settled at 3622 while prices down 5.8 rupees.
Now MCX Copper is getting support at 727.8 and below same could see a test of 720.6 levels, and resistance is now likely to be seen at 742.6, a move above could see prices testing 750.2.
Copper yesterday settled down by 0.78% at 734.95 as soaring energy costs prompted concern that the global economic recovery will be derailed, but signs that supply is tightening kept a lid on losses.
Logistics bottlenecks have helped drive copper stocks to “historically low” levels in regions that use the metal. China Evergrande Group missed its third round of bond payments in three weeks, intensifying market fears over contagion.
On warrant copper inventories in LME-registered warehouses have fallen to 65,500 tonnes from almost 240,000 in August. Stocks in Shanghai Futures Exchange (ShFE) warehouses at 50,062 tonnes are near 12-year lows and inventories in Chinese bonded warehouses have almost halved since July.
The premium for cash copper over the three-month contract on the LME shot to nearly $70 a tonne, the highest since 2015. A premium points to tight supply of metal.
Chile’s state miner Codelco will produce 2%-3% more copper this year than it had previously expected, despite a strike at its Andina operation, Juan Benavides, chairman of the world’s largest copper producer, told.
Record high copper prices this year have seen revenues at mining companies soar and unions in Chile pushing for more lucrative contracts, creating tense negotiations that risk strike action and loss of production.
Trading Ideas:
–Copper trading range for the day is 720.6-750.2.
–Copper prices fell as soaring energy costs prompted concern that the global economic recovery will be derailed.
–Codelco to produce more copper than expected, despite strike.
–On warrant copper inventories in LME-registered warehouses have fallen to 65,500 tonnes from almost 240,000 in August.
Courtesy: Kedia Commodities
Source: Comodity Online
