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“Traders may short copper at 438-439 levels with strict stop loss at Rs.444 for targets of 433 and 431.”, said Sunit Mehta, Research Analyst (Base Metals); Nirmal Bang Commodities to Commodity Online...

17 Jan 2013

MUMBAI (Commodity Online): MCX copper prices are in the negative territory and may come down further intra-day as fundamentals are not supportive. Copper for delivery on February 28 was spotted trading at Rs.438.50 a kilogram a loss of 0.02% against the previous close as of 12.02 PM IST.

“Copper prices are expected to come down further in the day.” said Sunit Mehta, Research Analyst (Base Metals); Nirmal Bang Commodities to Commodity Online.

“Traders may short copper at 438-439 levels with strict stop loss at Rs.444 for targets of 433 and 431.”, he said.

He expects the glut in copper stocks in China to continue contributing to a bearish trend until the first half of 2013.

In fact, overflowing inventories in the warehouses in China are being shipped to Rotterdam, Bloomberg said in a report published today. 

“The demand may pick up after second half of 2013 as China may invest aggressively in infrastructure, especially power grid spending. However, the process will take time. Until then, copper prices would remain subdued.” he pointed out.

Spending on China’s power grid, a major consumer of copper and aluminium, is forecast to rise at a faster pace in 2013. The State Grid Corporation of China has increased its 2020 target to 94,500km of UHV lines laid, compared with 78,000km in the previous target, an increase of 21%, Barclays said in a report.

China Securities Journal recently reported that the State Grid has set its 2013 spending target 4% higher y/y, after lukewarm growth in 2012 of 1.3%

Premiums have come down

“Premium of Chinese copper has also dipped to $50 a ton from $150/ton in a short time frame.” noted Sunit Mehta. Major growth in China would aid copper to reduce its abundant inventories.

Meanwhile, he advised nickel traders to buy around Rs.945-Rs.948 with stop loss at Rs.935 and targeting Rs.965-970.

Near month Nickel prices was seen trading at Rs.950.90, a loss of 0.25% as of 12.15 PM IST.

“Nickel prices are ruling in a tight range.” he concluded.


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