Copper on MCX settled down -0.24% at 312.10 while yesterday traded in the range as support seen from data showed activity in China's manufacturing sector unexpectedly expanded at its fastest pace in nearly two years in August as construction boomed, suggesting the economy is steadying in response to stronger government spending.
LME copper edged up 0.3 percent to finish at $4,630 after falling on Tuesday to the weakest since June 24 at $4,600 amid mounting supply. While upside is capped as LME exchange stocks rose once again on Thursday by 11,250 tonnes to 304,775, up 50 percent over the past three weeks. Still, the market remains vulnerable to risks around excess supply, Base metals, bar copper, have rebounded this year on the back of a credit boom and property rebound in China and on expectations that central banks will continue with loose monetary policy to bolster global growth.
Today prices can see support as workers at Codelco's small Salvador deposit will go on strike next week after failing to reach agreement in contract talks with the Chilean state-owned company. The strike is set to start on Monday after workers rejected Codelco's latest offer and the company said it had opted not to request a five-day mediation process. It could herald the start of tricky times ahead for mining companies in the world's no.1 copper producer, as a sharp fall in the price of the metal slimmed margins and forced cost cuts. Technically market is getting support at 310.8 and below same could see a test of 309.4 level, and resistance is now likely to be seen at 314.5, a move above could see prices testing 316.8.
--Copper trading range for the day is 309.4-316.8.
--Copper prices remained under pressure due to surge in LME stocks, surging by 50 percent over the past three weeks.
--A mine in Chile was halted and a potential strike at another operation raised the prospect of supply disruptions at the biggest copper-producing nation.
--Copper inventories in LME warehouses rose for an eighth day, the longest run since March 2015, as stockpiles in South Korea swelled to a five-year high.
Courtesy: Kedia Commodities