Copper prices rose marginally to Rs 669.25 per kg on April 1 as participants reduced their positions as seen by the open interest. The base metal closed in the positive territory after a gap down open tracking positive global cues.
It ended the week with a modest loss of Rs 0.20 or 0.03 percent on the domestic bourse. Copper prices jumped in two out of the four trading sessions on the MCX in a holiday-shortened week.
The non-ferrous metal has been trading higher than 5, 50, 100 and 200 days' moving averages but lower than the 20-day moving average on the daily chart. The Relative Strength Index (RSI) is at 49.54 which indicates neutral momentum in prices.
"Copper prices were under some pressure for March month with higher dollar and spiking US bond yields, but losses were capped by supply worries fuelled by shortages of concentrates. Chinese demand worries and a stronger dollar – the two main macro factors that are causing a general loss of risk appetite across the whole commodity space," said Navneet Damani, Head Research - Commodities and Currencies at Motilal Oswal.
Rising copper stock in LME approved warehouses is also weighing on the overall market sentiment. The Yangshan copper premium dipped to $65.50 per tonne, its lowest since January 13, indicates weakening demand for imported copper in China.
According to the International Copper Study Group (ICSG), data suggest the global refined copper market was in a 589,000-tonne deficit compared with a 427,000-tonne deficit for the first 11 months of 2020. Tight scrap supply worldwide is one of the reason for secondary output reduction in a year when overall refined copper output grew by 1.5 percent.
The US dollar index ended modestly higher at 93.04, up 0.10 percent on April 1 against the major cross. The dollar index hit a 2021 high of 93.47 earlier this week and soared 0.29 percent in the week.
MCX METLDEX increased 47 points, or 0.34 percent, to close at 13,862. The index tracks the real-time performance of key base metals.
In the futures market, copper for April delivery touched an intraday high of Rs 669.90 and a low of Rs 663.35 per kg on the MCX. So far in the current series, the base metal has touched a low of Rs 657.85 and a high of Rs 732.70.
Copper delivery for April gained Rs 1.30, or 0.19 percent, to settle at Rs 669.25 per kg with a business turnover of 2,717 lots. The same for May contract edged higher Rs 1.05, or 0.16 percent to Rs 669.40 per kg with a turnover of 102 lots.
The value of April and May’s contracts traded on April was Rs 1,527.77 crore and Rs 23.69 crore, respectively.
The red metal price settled with a gain of 0.66 percent, quoting at $8,807.50 per tonne in London.
Strategy for coming Week
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited
Strategy: In the coming week, traders should look for a sell-on-rise strategy in MCX Copper future where in our view optimal range to enter in sell position should be around the psychological level of Rs 675, keeping a stop loss at Rs 683.50 and set the target of Rs 660 – 658.50.
Rationale: MCX Copper has traded in a moderately bearish trend over the week. Copper April future has formed a Falling wedge pattern and the last few sessions ended sideways mode along with some corrections inside the channel. The price has remained in a quite narrow downward channel between Rs 665 -671 in the week. Although the last session was closed on a positive note above the support of 15-SMA of Intraday chart placed at Rs 667.30.
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