Fresh selling seen in MCX Copper; Support seen at 311.4
Commodity Online | October 17 2016
UPDATED 10:17:47 IST

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Copper on MCX settled down -0.87% at 313.05 after Europe's biggest smelter cut the premium it will charge customers for copper cathode next year, highlighting over-supply and weak demand. Germany's Aurubis will offer 2017 copper cathode to customers at a premium of $86 a tonne to the LME average cash price, down 6.5 percent from a premium of $92 this year, the company said. Another sign of the plentiful supply in the market was a 13 percent rise in copper inventories in warehouses monitored by the Shanghai Futures Exchange.

The dollar index was firmer after data showed U.S. retail sales rebounded last month as expected, reinforcing expectations of an interest rate increase from the Federal Reserve in December. While poor Chinese trade data fuelled concerns about demand in the world's top metals user, some of those fears eased on Friday when producer prices in China in September unexpectedly rose for the first time in nearly five years.

Copper cancelled warrants on the London Metal Exchange have continued to rise in Asia, exchange data showed on Friday October 14. While stocks rose a net 2,925 tonnes to 349,075 tonnes – a 4,725-tonne parcel arrived in New Orleans – fresh cancellations rose by 10,875 tonnes.

Singapore accounted for the bulk of the increase in cancelled warrants at 6,475 tonnes, with the Busan total rising by 3,750 tonnes. Technically market is under fresh selling as market has witnessed gain in open interest by 11.44% to settled at 33609 while prices down -2.75 rupee, now Copper is getting support at 311.4 and below same could see a test of 309.8 level, and resistance is now likely to be seen at 315.9, a move above could see prices testing 318.8.

Trading Ideas:
--Copper trading range for the day is 309.8-318.8.
--Copper slipped after Europe's biggest smelter cut the premium it will charge customers for copper cathode next year, highlighting over-supply and weak demand.
--Germany's Aurubis will offer 2017 copper cathode to customers at a premium of $86 a tonne to the LME average cash price.
--Copper cancelled warrants on the London Metal Exchange have continued to rise in Asia, exchange data showed on October 14.

Courtesy: Kedia Commodities