MCX Copper posted solid gains

MCX Copper closed at 354.30 with gain of 2.86% after registering days high near 354.70. Intra day low registered near 343.75

Copper futures posted solid gains as participants bought back previously sold positions on bullish trading-chart indicators, and supply news from Peru supported the metal.

Copper reacted to the upside on news that Southern Copper Corp. may be forced to temporarily close operations at its Ilo smelter and refinery and at its two copper mines in Peru because of protests that have cut supplies. Company officials have estimated that Southern Copper's operations in Peru will produce 330,000 tons of copper this year.

In addition to the Southern Copper news, Sterling Smith, vice president with FuturesOne, said participants began buying back already sold positions or short covering as they considered certain price-chart movements Wednesday as bullish.

WBMS Report;
The world copper market was in a deficit of 42,000 metric tons during the first four months of 2008, the World Bureau of Metal Statistics said Wednesday.

This compares with a deficit of 135,800 tons for the same period of 2007. Reported stocks decreased by 95,000 tons between the beginning of January and the end of April 2008, WBMS added. No allowance is made in the consumption calculation for unreported stock changes.

Copper mine production for the first four months of the year was 4.93 million tons, 3.6% lower than in January to April 2007. Refined production rose 1.7% to 5.996 million tons.

Chinese copper output rose by 193,000 tons, while Indian and Zambian production was slightly higher than the previous year, but output in Chile fell by 42,000 tons.

Consumption in January to April was 6.04 million tons, virtually unchanged from the same period of the previous year. Chinese consumption increased to 1.705 million tons from 1.627 million tons in the first four months of the previous year.

In April, refined copper production was 1.518 million tons and consumption was 1.548 million tons, WBMS said.

Copper inventories at LME, increased by 350 MT to 123900 MT.

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 358.1 levels. If sustain above this level can see a rally towards 361.9 and 369.0 , If market sustains below 350.9 can see a further fall towards 347.1 and 340.0


Recommendations-MCX Copper June: Buy at 351.50-352 Targets 356 and 358 SL 349.20


MCXARUN
9994500540