Copper on LME closed at $3,590 per tonne levels after making a high of $3,600. On MCX the February contract moved up by 14% compared to the previous week and made a high of Rs 174.7 per kg. Since the beginning of this year copper prices have moved up by 20% from their low levels of $2950 per tonne.
According to Amar Singh, the research head at Angel Commodities, in the short-term market has potential to go up to Rs 182- Rs 190 per kg with a downside at Rs 160 levels. But in the medium-term price is likely to witness profit-booking and selling pressure at high levels between Rs 190-Rs 200 for the MCX February contract.
Even Kunal Shah from Nirmal Bang Commodities feels that MCX February contract can touch Rs 180-Rs 185 per kg levels backed by improvement in manufacturing activity in China.
Initially in the last month the price movement was due to January index re-weighting and speculation of Chinese demand. Even this week despite the weak fundamentals fresh buying came in anticipation of demand recovery from China. It was also the $900 billion economic stimulus package announced by the US that generated interest in commodities.
Overall the fundamentals remain dull for copper following poor demand and growing inventory levels. The global refined copper market surplus is expected at 9.20 lakh tonne which is three times more than last year levels at 3.7 lakh tonne.
Even the LME inventory is at five lakh tonne which is the new high since November 2003 and is still expected to rise in the coming months.
The copper stocks in warehouses monitored by the Shanghai Futures Exchange also rose 72% from two weeks ago. China consumes around 13,000 tonnes of copper a day, and the rise in Shanghai inventories above 28,000 tonnes puts stocks at their highest since November 2008.
nidhi.sharma1@timesgroup.com
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