Technically Copper market is under fresh buying as market has witnessed gain in open interest by 9.9% to settled at 5462 while prices up 5.75 rupees.

Now MCX Copper is getting support at 461.1 and below same could see a test of 457.4 levels, and resistance is now likely to be seen at 466.7, a move above could see prices testing 468.6.

Copper yesterday settled up by 1.25% at 464.7 on optimism about a recovery in China’s demand, massive global stimulus and tight supplies.

Prices of the metal were lifted in the quarter by a lack of scrap in China, supply risks in top producer Chile.Copper prices have been supported by hopes of stimulus, low inventories and a weaker U.S. dollar.

Factory activity in top copper consumer China quickened faster in June, beating expectations, while the total new orders index also brightened, suggesting that domestic demand is picking up.

However, export orders continued to contract in June and factories cut jobs for the second time since they reopened, indicating that the COVID-19 crisis will drag on growth for some time.

However, supply and demand fundamentals suggest a fair price for copper around $5,500, with lower Chilean output offset by weak demand outside China.

Chile’s copper output could decline by 200,000 tonnes, or 3.5% of 2019 production, as coronavirus cases rise, its mines minister said.

On-warrant copper inventories in LME-registered warehouses fell by 2,450 tonnes to 112,850 tonnes, the lowest since Jan 17.

Stocks in Shanghai Futures Exchange (ShFE) warehouses, at 99,971 tonnes, are the lowest since January 2019.In a sign of tighter nearby supply, the discount for cash copper versus three-month metal on the LME fell to $5-$10 from $30 earlier this month.

Trading Ideas:
–Copper trading range for the day is 457.4-468.6.
–Copper prices gained on optimism about a recovery in China’s demand, massive global stimulus and tight supplies.
–Prices of the metal were lifted in the quarter by a lack of scrap in China, supply risks in top producer Chile.
–Factory activity in top copper consumer China quickened faster in June, beating expectations.

Courtesy: Kedia Commodities

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