Copper on MCX settled up 0.16% at 450.95 recovered from the day's low as support seen after the update that reliable supply of copper from the world’s largest producer, Chile, is under threat as unions face broad wage renegotiations across top global miners.
Three-month copper on the LME rose 1.9% as workers in the largest union at Antofagasta Plc’s Los Pelambres copper mine rejected an offer for a new labour contract, paving the way for striking action.
Workers and the company would still have to go through a meditation process with the government to reach a second deal. Strong demand from the growing electric economy could be undermined by supply disruptions if wage contracts can’t be negotiated across the major producer.
Also China’s lower copper imports in February weakened the sentiment on copper. Yesterday US data showed consumer prices slowed down to 0.2% as expected from 0.5% in January, while core prices slowed down as well to 0.2% from 0.3% in January.
On a yearly basis, consumer prices accelerated to 2.2% as expected from 2.1% in January, while core prices steadied at 1.8% in line with expectations. While New Federal Reserve Chair Jerome Powell said in his Congress testimony that hiking interest rates four times this year would be considered a "gradual pace", bolstering expectations of a March rate hike.
While traders are eyeing on the Federal Open Market Committee will meet on March 20-21 under Powell for the first time, with policymakers expected to release three-year forecasts for inflation, growth, unemployment, and interest rates. Technically now Copper is getting support at 448.4 and below same could see a test of 445.9 level, And resistance is now likely to be seen at 452.6, a move above could see prices testing 454.3.
--Copper trading range for the day is 445.9-454.3.
--Copper prices gained tracking firmness in LME prices finished 0.5 percent higher at $6,945 amid weakness in dollar.
--China's imports of unwrought copper and copper products in February stood at 352,000 mt, down 20% month on month while up 3.5% year on year.
--Copper speculators cut their net long position by 12,627 contracts to 28,776 contracts, according to the CFTC data.
Courtesy: Kedia Commodities