Copper futures slip nearly 1% to Rs 671.15 per kg on weak demand, firm dollar; further downside likely

Copper prices declined to Rs 671.15 per kg on March 23 tracking a weak global trend and a firm dollar. The jump in stocks at LME and ShFE approved warehouses along with demand worries from China kept weighed on prices.

The non-ferrous metal has been trading higher than 50, 100 and 200 days' moving averages but lower than 20 and 5 days’ moving average on the daily chart. The Relative Strength Index (RSI) is at 49.28 which indicates sideways momentum in prices.

The Yangshan copper premium fell to $65.5 a tonne signalling weakening demand for imported copper into top consumer China, Reuters reported.

Global sentiments have soured amid worries over a resurgence in covid cases and the imposition of tighter lockdown which may scuttle the nascent recovery in global health.

Neha Qureshi, Technical Research Analyst at Reliance Securities said, “LME Copper is trading below 21-Daily Moving Average which is placed at $9075 levels indicating for downside momentum up to $8945-$8860 levels. Resistance is at $9040-$9150 levels.”

MCX Copper April holds support near Rs 671.90-667.80 levels where it could see an upside move up to 675.50-677.00 levels. She advised her clients to sell April Copper at Rs 675 with a stop loss of Rs 677 and for a target of Rs 671.

The US dollar rose to 92.11 or up 0.40 percent in the evening session against the rival currencies.

MCX METLDEX dropped 59 points, or 0.42 percent, at 13,934 at 18:43. The index tracks the real-time performance of key base metals.

In the futures market, copper for March delivery touched an intraday high of Rs 674.45 and a low of Rs 668.35 per kg on the MCX. So far in the current series, the base metal has touched a low of Rs 585.70 and a high of Rs 737.

Copper delivery for March slipped Rs 6.50, or 0.96 percent, to Rs 671.15 per kg at 18:44 hours with a business turnover of 2,101 lots. The same for April contract edged lower Rs 6.30, or 0.92 percent to Rs 675.50 per kg with a turnover of 2,296 lots.

The value of March and April’s contracts traded so far is Rs 1,476.40 crore and Rs 313.02 crore, respectively.

MCX Copper is expected to trade in a bearish trend with resistance at Rs 674 level and intermediate resistance at Rs 671 level, according to Motilal Oswal. The brokerage firm advised its clients to sell on rally targeting lower support at Rs 667-664.50 zone.

Axis Securities advised its clients to sell copper at Rs 671 with a stop loss at Rs 675 and a target of Rs 666.

At 1317 (GMT), the red metal price slides 1.58 percent, quoting at $8,984.25 per tonne in London.

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