Copper - July 30, 2021 - Reliance Securities

Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities

LME Copper rose for the second week running after signals from the U.S. Federal Reserve that it was in no rush to tighten and efforts by China to calm fears of new regulation spread a bullish mood through markets.

Copper also found support as floods in top consumer China sparked demand hopes at a time when inventories were falling.

Floods in central China, especially in the industrial and transport hub city of Zhengzhou in Henan province have raised supply concerns and demand for rebuilding damaged infrastructure, which could consume industrial metals.

Prices also got a lift after the union of workers at Escondida copper mine in Chile, called upon its members to vote to strike.

COMEX speculators raised their net long U.S. copper positions by 16,937 contracts to 46,137 in the week to July 27, data from the U.S. CFTC showed.

OUTLOOK

Prices could continue to get a lift from the strong demand due to subsidies for offshore wind projects in China.

Additionally, prices could also push higher if the threat of a strike at a major mine in Chile goes into effect.

Meanwhile, the progress of a $1 trillion infrastructure investment bill in the U.S. Senate will be keenly awaited by investors as the passage of the bill will be positive for the sector.

China has released some copper into the markets to cool markets. But last time the amount released was lower than expected. So, investors will keep an eye out for the auction as China has promised to more stocks to cool prices.

Technically, LME Copper holds a support of 21-Daily Moving Average which is placed at $9545 level below which could see a Bearish momentum up to $9311-$9270 levels. Resistance is at $9810-$9933 levels.

Domestically, MCX Copper August below 755 levels could see a Bearish momentum up to 746-739 levels. Resistance is at 758-765 levels.

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Source : Equity Bulls

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