EPICRESEARCH COMMODITY UPDATE: Copper

Weekly Price Performance

Copper prices declined 2.8 percent in the last week and closed at $7,846.5/tonne on Friday. In the domestic markets MCX copper declined 1.6 percent tracing bearishness in the international prices. MCX Copper prices touched a weekly low of Rs. 432.2 per kg and closed at Rs. 438.8 per kg on Friday.

Copper Inventories

LME Copper inventories increased by 4.61 percent in last week and stood at 3,12,400 tonnes on Friday as against 2,98,625 tonnes on 14th December 2012. Copper inventories at warehouse monitored by the Shanghai Futures Exchange fell by 0.2 percent to 2,04,997 tn in the w/e 21st December, 2012.

Factors that influenced copper prices

Worries over the fiscal cliff issue which remains unresolved. US fiscal cliff issue is nearing the deadline. If the US law makers are unable to avert the issue before January 1st 2013 it might cause automatic spending cuts and tax hikes which might push the US economy back into recession. Strength in the DX along with rise in the copper inventories on LME also weighed on the copper prices. However, positive data from the US and China cushioned sharp fall in the copper prices. In the domestic market, depreciation in Indian rupee cushioned fall in the copper prices on MCX.

Outlook

Copper prices in the coming week is expected to remain firm due to positive economic data from the US. Investors might follow a wait and watch stance ahead of the Christmas and New year vacations. US Fiscal cliff issue of the nation remains unresolved is likely to make investors adopt cautious approach. Depreciation in the Indian Rupee will act as a supportive factor for the copper prices on MCX.

Weekly Technical Levels

LME Copper: Support $7685 /7520 Resistance $8060/8270 (CMP: $7,832)

Buy MCX Copper Feb between 434-435, SL - 429, Target - 443 (CMP: 436.55)
 
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