copper intraday

Copper futures trade 4-month low in Shanghai
11 June 2008 10:21:00

Copper futures traded near a four- month low in Shanghai after China's stock market extended losses amid concern a central bank order for lenders to set aside more reserves will hurt corporate earnings and slow economic growth.

The Shanghai Composite Index, which tracks the bigger of China's two stock exchanges, dropped below 3,000 points for the first time since April. Copper, used in buildings and power grids, often moves in line with economic growth expectations.

China told lenders to set aside more money for a fifth time this year to cool inflation that is close to an 11-year high in the world's fastest-growing major economy. Banks must put aside a record 17 percent of deposits asb reserves starting June 15, which rises to 17.5 percent from June 25, the People's Bank of China said June 7. The current requirement is 16.5 percent.

Workers from Mexico's largest mining union fought with police and destroyed road barriers in the Mexican capital today to pressure for a solution for strikes at copper producer Grupo Mexico SAB, daily La Jornada reported.

Copper demand growth is slowing as users respond to six straight annual price jumps by substituting with aluminum and plastics when they can, said Luvata, the world's third-largest producer of brass and copper products.

Consumers used cheaper raw materials to replace about 517,000 metric tons of copper consumption last year, Warren Bartel, senior vice president at London-based Luvata, said today at a Metal Bulletin conference in Sofia, Bulgaria. That's equal to about 3 percent of annual refined metal usage.

Copper prices will this year average 15 percent higher than in 2007 on mine disruptions and delays to new projects, according to London-based researcher CRU. The benchmark three-month contract will average $8,200 a metric ton, up from $7,103 a ton last year, analyst Nikhil Shah said today at a Metal Bulletin conference in Sofia, Bulgaria.

The Dollar Index, a weighted measure against the euro, yen, pound and three other major currencies, rose for a second day after Federal Reserve Chairman Ben S. Bernanke said risks to the U.S. economy have diminished, prompting traders to increase bets on higher interest rates.

MCX Copper June - Technical Outlook:

The daily stochastics have crossed over down which is a bearish indication. The prices closed below short term and medium term EMA, which supports bears. MACD is heading downwards in positive region, showing decrease in bullish momentum.

Technical are neutral to bearish signalling sideways to lower prices in the near term. Initial support for the market is around 335.98 levels. If broken can see further fall to 333.97 and 331.28, If market holds above 338.67 further rally can be seen towards 340.68 and 343.37.

Recommendations-MCX Copper June: Sell at 337.50-338 Target 335 and 332 SL 339.80

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