This morning at the LME and SHFE, copper prices are seen trading down by close to 1% from the previous close.
Copper’s 3 month forward prices advanced to $6737 and ending the day at $6675, higher by $15 from its previous close. Likewise, at the MCX, the April futures ended at Rs 404.80, surging to more than Rs 407. As we understand, the earthquake and tsunami in Chile, the world’s largest producers of copper made copper prices move higher. Copper stocks declining by 1875 tons also supported the metal while the global markets trading positive and the US releases turning better than expected supported the metals. This morning at the LME and SHFE, copper prices are seen trading down by close to 1% from the previous close. Mines in Chile, the world’s biggest producer were returning to normal operations after the government ordered an evacuation following an earthquake and tsunami.
We believe that this may have been the reason for much of the whipsaw in prices and hence, copper is slightly volatile this morning. We believe that as the day progresses, copper may trade slightly lower, though it may eventually rebound higher supported by positive market dynamics. Also, we understand that though the commodity may move higher, a good amount of volatility could be noticed ahead of key events expected during the day. We have the ECB monetary policy stance and the key data from the US. Looking at the above analysis, we recommend buying copper from the lower levels for a minimal profit potential for the day.