MCX Copper fell for the first time in three sessions as sliding energy prices

18 June 2008 09:48:24

MCX Copper dropped to a low of 342.20 following heavy inventory data at LME and a fall in bullion and energy market. Copper closed at 344.45 with a loss of Rs. 1.15 per kg, registered days high near 348.25

The blockade of a highway giving access to a Southern Copper Corp. mine in Peru, a major copper producer, also pushed prices higher. But further increases in copper prices could be limited as a seasonal weakening in demand is coming.

Copper fell for the first time in three sessions as sliding energy prices curbed demand for commodities as a hedge against inflation.

Protesters in Peru battled police and blocked roads for seventh day yesterday in a bid to stop legislation that seeks to cut mining-tax income for local governments, a mining union official said. The protests have prevented workers from reaching operations owned by Southern Copper Corp.

Copper inventories at LME, increased by 1500 MT to 123550 MT.

International Analysis: A restrained demand picture is likely to hinder LME copper prices from advancing back up to $8,500 a metric ton. Expects market surpluses in '08 and '09, with next year's surplus likely to be particularly large. Traders would be very skeptical about the sustainability of the current move higher, and would not be surprised to see an eventual decline back to the mid to high $7,000/ton range.

MCX Copper June - Technical Outlook:

The daily stochastics have crossed over up which is a bullish indication. The prices closed above short term and medium term EMA, which supports bears. MACD is heading upwards in positive region, showing increase in bullish momentum.

Technical have turned neutral to bullish and market is expected to remain positive above 347.7 levels. If sustain above this level can see a rally towards 351.0 and 353.8, If market sustains below 345.0 can see a further fall towards 341.7 and 338.9


Recommendations-MCX Copper June: Buy at 344 Target 347 and 349 SL 341.50

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