Contract and Three Month Lows For MCX Copper

MCX Copper slipped to contract lows, it even tested a three month lows on Monday. The bearish bets on the metals pack continued after the release of negative Purchase Managers Index data in China and a steep recovery in Indian Rupee against the Dollar. London Copper forwards remained at two month lows but managed to pick up in intraday trades. The three month forwards were marginally up by $ 37 at $ 7885 per tonne.

India Rupee tested a 10 day high of 53.86 against the Dollar on Monday and settled at 53.87. The domestic currency is on a lower path today trading at 54.03 when last checked. Dollar gained against the Euro and tested a one and half month highs. The pair ended at 1.3062 on 25 Feb. The Dollar gains were due to the expectations that Federal Reserve Chairman will clarify some doubts related to bond buying programme. Vagueness on elections in Italy further dampened the mood.

MCX Copper April expiry closed at Rs 429.2 per kg, down Rs 1 or 0.3%. The prices tested a high of Rs 431 per kg and a low of Rs 427.5 per kg. The worrying part is that the open interest is sharply picking up as Copper is losing ground. The volumes also picked up to 22210 kgs from 17900 kgs last week. Prices of Copper looked supported at Rs 426 per kg. Resistance for the contract is at Rs 432 per kg.

In Aluminium, World primary production increased by 44.9 million tonnes in 2012 to 44.4 million tonnes in 2011. Newer capacity in China, India, and Qatar, and restarting smelters that had been shut down in 2008 and early in 2009, accounted for most of the increased production. The increased production from these smelters was partially offset by shutdowns primarily in the second half of the year as aluminum prices declined.

World inventories of metal held by producers, as reported by the International Aluminium Institute, remained in a narrow range through August at about 2.4 million tons since yearend 2011.

LME Aluminium three month forwards closed at $ 2049 per tonne, down $ 15 per tonne. MCX Aluminium closed at Rs 109.2 per kg, down 1.5%. Aluminium tested a low of Rs 108.9 per kg which was also its contract low.

Metal R1 R2 S1 S2
Copper 432 433 426 423
Aluminium 111 112 108 106.5