Copper in unchartered territory as price hits lifetime on LME, COMEX and MCX on surging demand

MCX METLDEX surged 186 points, or 1.21 percent, at 15,558 at 20:41. The index tracks the real-time performance of key base metals.

Jigar Trivedi, Research Analyst- Commodities Fundamental, Anand Rathi Shares & Stock Brokers said, “LME Copper closed above $10,000 as traders are just waiting for history to witness as Copper inching towards a record high of $10,190. On the other side, COMEX copper has already hit an all-time high of $4.63 per pound.”

Supply constraints and rising Chinese demand has pushed Aluminium to record high on the MCX. Imports to China jumped 43.1% year-on-year in April 2021, compared with market consensus of a 42.5% rise, and after a 38.1% growth a month earlier, amid strengthening domestic demand and higher commodity prices. 

China's trade surplus narrowed to $42.85 billion in April 2021 from $45 billion in the same month of the previous year but far above market expectations of $28.1 billion, amid improving global demand. We continue to remain bullion on base metals, particularly copper zinc aluminium and nickel, he said.

The red burst higher to a record peak, fuelled by speculators and industrial buyers on the back of rosy economic data as Western economies recover from the pandemic.

China’s imports of unwrought copper and products in April’21 stood at 484,890 tonnes, down from 552,317 tonnes reported in March’21. Copper arrivals in the world’s largest metal consuming nations dipped over 12 percent following the surge in red metal prices and slower expansion in their industry segment.

"A steady decline in the Copper inventories in the LME monitored warehouse further signalled towards a tighter market which further strengthened the prices. LME Copper inventories have plunged over 24 percent since mid-April 21," said Yash Sawant, Research Associate, Angel Broking Ltd.

The US dollar eased 0.70 percent to 90.29 in the evening session against the rival currencies.

Technicals

The non-ferrous metal has been trading higher than 5, 20, 50, 100 and 200 days' moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 79.38, which indicates bullish movement in prices.

At 15:21 (GMT), the red metal price rose 3.10 percent to quote at $10,424.75 per tonne in London.

Trading Ideas

Sriram Iyer, Senior Research Analyst, Reliance Securities

London Copper prices rose to a record high on Friday's evening trade as tight supply outlook and hopes for strong demand amid the global economic recovery boosted sentiment. 

The only concern is the lack of physical buying in China as China's copper imports in April fell from the previous month, customs data showed, as a rally in prices for the metal to the highest levels in a decade made purchases less appealing.  

Technically, LME Copper resistances remain at $10,265 and $10,413 while supports remain at $9,964.00 and $9,816.25. 

Technically, MCX Copper May supports remain at Rs 764.80-759.00. Resistances are at Rs 777.20 and Rs 780.00 and a break above both resistances could see copper test Rs 800.00 levels.

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