Commodity Radar: Tariff concerns, supply issues keep copper range-bound; time to buy dips for these targets, says Religare experts
Copper contracts on the MCX were trading lower on Tuesday despite a positive trade in this base metal in the international markets.
The August contracts were hovering at Rs 885.95, down Rs 1.60 or 0.2% around 2 pm.
Copper contracts on the COMEX were trading at $4.44 per lb, marginally up at 0.11% while the three-month LME copper contracts were trading around $9,687 a metric ton.
Commenting on the current trends, Ajit Mishra, Senior Vice President – Research at Religare Broking, said that Indian copper futures recently contracted sharply due to U.S. tariff news, notwithstanding India’s limited exposure.
“The U.S. had imposed a 50% tariff on semi-finished copper products last week, effective August 1, citing national security concerns. This led copper futures on MCX to plunge 4%, hitting record lows near Rs 861.70/kg for the August contract and Rs 866.45/kg for September. The latest news of suspended operations at Chilean mine El Teniente after a tunnel collapse adds to the positive tone currently,” Mishra said.
In his view, long-term fundamentals continue to support the market, considering the tightening supply situation. “The available stocks had plunged by 76% since mid-February, driven by accelerated cargo movements to the U.S. amid an ongoing investigation into copper imports. Tech view
Mishra said that he sees a mixed bias for copper on the technical charts, though a short-term bounce potential exists along with somewhat momentum positive in the medium-term.
Copper Weekly Chart
The Religare analyst recommends a buy-on-dips strategy near the support region of Rs 879-881 with a strict stop loss below Rs 870 and targeting Rs 900–905 is reasonable, provided the resistance of 889/890 is decisively cleared.
However, if prices drop below Rs 870, the risk of further downside shall increase, and under this scenario, copper can move lower towards the 860/855 level, he suggested.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)