Copper Updates

Copper Updates

LME base metals were mixed and trading in tight ranges on Thursday due to lingering concerns about Greek debt and the U.S. fiscal situation. Copper showed signs of further correction after it settled down by $ 62 per tonne at $ 7743 per tonne. Indian Copper futures are likely to find resistance at Rs 441 per kg and support at Rs 434 per kg. The prices of February expiry closed at Rs 437.8 per kg.
LME Zinc ended at $ 2185 per tonne when last checked, down by $ 16 per tonne. A further increase of 3125 tonnes was noted in Zinc inventories today with total stockpiles at record high of 1200450 tonnes. MCX Zinc settled trading at Rs 110.2 per kg, up 0.23%.
Dollar was largely stronger last night before the US data after which it closed down. However till the time damage was done in metals and it induced selling pressure. Dollar closed marginally lower against the Euro at 1.295.
In the U.S., the Commerce Department reported earlier that new home sales fell by 0.3% to a seasonally adjusted 368000 units in October. There are also concerns about the need for the US Congress to reach a compromise to avoid $600 billion in tax increases and spending cuts due to start in January, a combination known as the fiscal cliff that could hurt the world's largest economy.
In Eurozone, National Institute of Statistics said that Spanish retail sales rose to a seasonally adjusted annual rate of -9.7% in October, from -11.0% in the preceding month.
Greece lenders reached an agreement this week to reduce country's debt-reduction target by EUR 40 billion to 124% of gross domestic product by 2020. But the lack of detail on how Greece will implement reforms needed to meet its new debt targets has affected investor confidence.

Copper Updates

Xstrata Copper's Antapaccay copper mine in southern Peru commenced production of commercial grade copper in concentrates at the beginning of November and has delivered its first shipment to Matarani Port for delivery to customers worldwide.
Plant commissioning activities continued as Antapaccay progressively ramps up to the nameplate processing capacity of 70,000 tonnes per day in the first half of 2013. The mine will produce an average of 160,000 tonnes of copper in concentrate per annum, plus gold and silver by-products, in the initial years of production.
Antapaccay is a major copper operation with a mine life of more than 20 years, including a new mine and state-of-the-art concentrator facility. The mine is located approximately 10 kilometres from our Tintaya open pit mine, where mining activities are scheduled to end in the coming months, and benefits from Tintaya's existing administrative and logistics infrastructure and experienced workforce.
The Antapaccay mine will employ a permanent workforce of around 1,400 people, with the majority of workers transferring from the existing Tintaya mine as it closes, and will create further opportunities for local employment.
Xstrata Copper Chief Executive Charlie Sartain said:
“I am delighted to announce that we commenced production at our major Antapaccay project on schedule and in line with the original budget of $1.5 billion, a significant achievement for a project undertaken through a period of industry inflation and global economic uncertainty.
Antapaccay extends and increases Tintaya's contribution to important local infrastructure, ongoing opportunities for local suppliers, skills training and enterprise development, royalty and tax payments and substantial voluntary annual investment in community projects and partnerships.”
The Antapaccay deposit has recently been expanded by 30% to an estimated total Mineral Resource of over 1 billion tonnes at a grade of 0.49% copper using a cut-off grade of 0.15% copper, including gold and silver by-products. The Mineral Resource contains 5 million tonnes of copper metal.
The highly attractive Tintaya geological district also hosts the Coroccohuayco deposit, with a current Mineral Resource of 324 million tonnes at a grade of 0.93% copper, and a number of exploration targets within our extensive mineral tenements.

Copper Trading Level's

TUESDAY 27-11-2012

TRADING LEVELS FOR MORNING SESSION


S1 RS 431.60 , S2 RS 428.70 , S3 RS 424.80


R1 RS 436,30 , R2 RS 438.40 , R3 RS 441.30

Copper updates

Base metals are mixed in tight ranges as the market remains focused on a meeting of eurozone finance ministers regarding Greece's bailout package. The meeting is scheduled to start later in the global trading day. Last week business confidence data and fall in Dollar elevated the base metals.

Germany business climate index increased to 101.4 in October compared to 100 in the month of September. In France, the business confidence rose more than expected. INSEE said that French Business Confidence increased to 88 in the quarter ending September 2012, compared to 85 in the previous quarter.

In US, Federal Reserve Chairman Ben Bernanke warned on the US budget crisis. Bernanke remained worried on the pace of recovery and improvement in jobs markets at a slower pace. Bernanke remained worried on the percentage of budget deficit. The budget deficit now stands at 7 percent of the GDP.

World Bureau of Metal Statistics (WBMS) showed that copper market recorded a deficit of 267000 tonnes in January to September 2012 which follows a surplus of 248000 tonnes in the whole of 2011. The total reported stocks rose by 3700 tonnes during September and ended the month 129000 tonnes lower than at the end of 2011.

World Lead market was in surplus of 11000 tonnes in January- September 2011. Lead markets were in surplus of just 600 tonnes in full year ended 2011. The total stocks at the end of September were 86200 tonnes lower than at the end of 2011.

In currency markets, Dollar slowed sharply down against the Euro ending at 1.2977 compared to 1.2827 on Monday. Dollar is now seen trading at 1.2956 against Euro and is expected to bring some profit booking in the metals space.

LME Copper ended the last session at $ 7692 per tonne, down $ 42 per tonne. MCX Copper ended at Rs 431 per kg, compared to Rs 425 per kg at the beginning of the week. MCX Nickel closed at Rs 920 per kg last week compared to Rs 916 per kg on Monday. LME Nickel three month forwards closed at $ 16595 per tonne, down $ 130 per tonne.

Copper Updates

The copper market recorded a deficit of 267000 tonnes in January to September 2012 which follows a surplus of 248000 tonnes in the whole of 2011. The total reported stocks rose by 3700 tonnes during September and ended the month 129000 tonnes lower than at the end of 2011.
World mine production in January to September was 12.46 million tonnes which was 3.7% higher than in the same period in 2011. Global refined production rose to 15.06 million tonnes up 1.6% compared with the first nine months of 2011 with significant increases recorded for Spain of 66500 tonnes and India of 16800 tonnes. Chilean output fell by 132900 tonnes. Refined Copper production in September 2012 was 1.69 million tonnes.
Global consumption for January to September 2012 was 15.33 million tonnes and the comparable figure for the 2011 calendar year was 14.54 million tonnes. Chinese apparent consumption in January to September 2012 rose by 1.01 million tonnes to 6.60 million tonnes which represented just over 43% of global demand. EU27 demand was, at 2.30 million tonnes, 8.6% below the January to September 2011 total. Refined Copper consumption was 1.72 million tonnes in September 2012.
On Thursday, LME three month Copper forwards was trading at $ 7731 per tonne, up $ 6 per tonne. MCX Copper was trading at Rs 427 per kg, up 0.3%.

MCX Copper Updates

Antofagasta group Copper production gained 4 percent in third quarter ending 2012. The production report from the company showed that the Copper production was 179800 tonnes in the third quarter ending 2012. The production in the first nine months of the year was 515800 tonnes, up 11.5 percent from the corresponding period last year. Higher production in Esperanza mine increased the overall production of Antofagasta. The company is expected to produce 700000 tonnes of Copper in full year ended 2012.

Esperanza mine produced 45600 tonnes of payable Copper in Q3, up 21 percent from 37700 tonnes in Q2 12. This was due to a 12.5 percent increase in ore grades as well as a 6.8 percent increase in average plant throughput from 79700 tonnes per day in Q2 2012 to 85100 tonnes per day in the current quarter.

Los Pelambres produced 98800 tonnes of payable copper in Q3 2012 compared with 101300 tonnes in Q2, reflecting a decrease in ore grades from 0.71% in Q2 to 0.67 percent in Q3, partly offset by a slight increase in plant throughput. Copper production in the first nine months of 2012 was 296000 tonnes compared with 297400 tonnes in the comparable period in 2011, due to a decrease in ore grades, partly offset by an increase in plant throughput and higher recoveries.

MCX Copper Updates ( Base Metal )

The entire Copper and Base Metals complex can remain under pressure over the next few months. With weaker Chinese economic activity & continued growth fears globally, more specifically in Europe, Copper and Base Metals complex should remain under pressure, grinding lower over the coming months.

Markets generally tend to be slower in anticipating negative than positive developments. The slight bounce up in Copper and Base Metals following Chinese GDP numbers yesterday may have largely been on short covering & may not last longer. The short covering in copper has resulted in some tightening of the nearby spreads. Along with Copper, Base Metals like Aluminum, Nickel, Zinc, Lead and Tin were also stronger.

China’s gross domestic product (GDP) grew 7.6% in the second quarter from a year earlier, in line with estimates. June industrial-production growth of 9.5% was just below forecasts, while a rise in fixed-asset investment of 20.4% was above the consensus. China’s economy is still growing, but is likely expanding at a much slower pace than the official numbers indicate. But the IP (industrial production) component came in below expectations.

Copper prices generally rise on positive Housing Data. But the recent encouraging Housing Data from the US should not be looked upon as a major Economy Booster as it no more plays the important role in the GDP as it did a few years ago & neither are these news any solid indicator of an improvising housing sector in the US. Housing sectors now accounts only for 2.3% of GDP as compared to a 6.3% in the pre 2008 times. Distressed sales also accounts for a larger share of the total housing sales rather than new home sales, which largely indicates the current state of this sluggish sector in the United States.

MCX Copper Tips

MCX Copper futures tumbled further during the afternoon trades, extending a weak start today as dollar rallied and global prices dropped. The LME Copper futures tumbled under $7900 per tonne amid economic worries and a bout of strength in US dollar. European stocks dropped heavily following Standard & Poor's decision to cut the credit ratings of five Spanish regions as well as an earnings warning from US chemicals giant DuPont. LME Copper trades at $7856 per tonne, down $86 per tonne on the day.

The Spanish economy contracted by 0.4% in the third quarter of 2012 amid challenging economic conditions and persistent government austerity measures, according to a latest report from the Bank of Spain today. The contractionary course on which the Spanish economy had embarked a year earlier continued in the central months of the year, in a setting marked by financial conditions that were adverse though somewhat slacker than in the previous quarter, the bank noted.

Data out yesterday in Asia showed that the Japanese exports tumbled by 10.3% in the year to September, recording a drop for fourth consecutive month. This was the biggest drop in the measure for nearly 18 months. This hurt the sentiments on worries that the global economy is extending its weak run and demand for copper might slow in near term. In a continued spree of depressing news for world economy, the German central bank stated that there are increasing signs that a perceptible expansion of economic growth in the third quarter of 2012 will be followed by stagnation or even a slight decrease in gross domestic product in the final quarter of the year.

US Dollar rose to a one week high following the Spanish economic worries amid an overall bearish undertone in risky assets. The currency quotes just above 1.3000 levels against the Euro right now. All the commodities like gold and crude have tumbled by more than 1% and a similar undertone prevails in European stocks too. MCX Copper futures had slipped under Rs 430 levels yesterday and traded negatively right from the start today. The commodity quotes at Rs 426.60, down Rs 3.40 per kg or 0.56% on the day with 4.83% increase in the open interest.

MCX Copper Updates

MCX Copper nov futures are quote slightly lower at present, tracking the weak worldwide cues as the equity stock markets about the world gave up some of their latest gain amid doubts over global economy and profit selling ahead of the weekends. A technology stock, particularly Google was hit hard yesterday after a poor earnings outcome for the September quarter and the undertone in Asia and Europe turned mostly bearish today. Euro also dropped for a second day and LME Copper futures are quoting at $8114, down nearly 90 dollars per tonne on the day or 1.06%.

The Euro dropped yesterday as traders eyed the newest European assembly summit. The meeting wrapped up the instance meeting Thursday night and said it has set a closing date of Jan. 1 to agree on a governmental framework for a single decision-making mechanism. The single currency extended losses from a one month high of 1.3140 against the US Dollar and quotation marks around 1.3050 right now.

Copper nov had witnessed a flat session yesterday after Chinese market grow at its weakest pace in around three years. The red metal tanked through $8200 per tone today, as a failure to hold on above the mark hurt the sentiment. London Metal Exchange Copper nov inventories witnessed a big fall of 4250 tonnes today. The inventories are at 220900 tonnes right away.

This draw in inventories may possibly hold the commodity in case the prices fall further. Traders would be eying development European committee meeting on its second and last day. MCX Copper futures for November are trading at Rs 440.85 per kg, down Rs 2.20 per kg on the today. The counter has witnessed a 1% rise in the open interest. Prices could ease towards Rs 439 levels during the route of the session.

Base metal news

The Nickel market was in surplus during January to August 2012 with production exceeding apparent demand by 77000 tonnes. World Bureau of Metals Statistics (WBMS) has said that in the whole of 2011, the calculated deficit of Nickel was 3200 tonnes. The stockpiles of Nickel held in the LME at the end of August were 9600 tonnes higher than at the end of the previous year.

Refined production of Nickel in January to August 2011 totalled 1.204 million tonnes and demand was 1.13 million tonnes in January- August 2012. In August 2012, nickel smelter production was 162600 tonnes.

World Nickel mine production during January to August was 1.255 million tonnes that was 135000 tonnes above the comparable 2011 total. Japanese refinery output increased by 4400 tonnes compared with 2011 but apparent demand was 15500 tonnes lower than in 2011. World apparent demand was 77100 tonnes higher than the previous year. In August 2012, nickel smelter consumption was 146400 tonnes.

Copper Trading Level's

TRADING LEVELS FOR MORNING SESSION


S1 RS 437, S2 RS  434, S3 RS  430

R1 RS 441 , R2 RS 443, R3 RS  446

Copper Updates

Copper remained a sole performer in the metals pack with dull to positive trading while other metals slipped in red after European markets open. The Euro moved higher versus the Dollar after reports of slowdown in Consumer Price Inflation (CPI) data in Eurozone and improvement in Germany economic sentiment. ZEW Centre for Economic Research said that its index of German economic sentiment improved by 6.7 points to minus 11.5 in October from September's reading of minus 18.2.

Eurozone CPI slowed to 2.6% in the month of September as per Eurostat report. Analysts had expected CPI to hold steady at 2.7%. The news of surprise marginal fall in CPI has brought buying in Euro. The greenback is trading down by 0.5% at 1.301 against the Euro on Tuesday. Hopes that Spain will ask for bailout also drove the markets.

Copper has been a silent performer in the day so far. The LME three month forwards are up by $ 35 per tonne to trade at $ 8155 per tonne. MCX Copper remained on a sluggish mood today, trading at Rs 435 per kg, unchanged from last night. Participants mostly remained hesitant in taking positions even after weak Dollar on account of pressure relating to economic crisis.

This year China consumption is expected to grow by 3 to 4% range as per market sources. The total consumption in China is likely to stay at 7.7 million tonnes in 2012, according to Chinese media. The likelihood of Copper to gain in the future would depend upon the real consumption and inventories picture.

The inventories of copper maintained by Shanghai futures exchange is at 181514 tonnes. But the non reported inventories figure can be much higher than the current that has impacted the growth of the metal. China will also not want the prices to move sharply higher in near term as that will affect the consumption cost of the country. China consumes more than 40% of the total World Copper.

Rio Tinto third quarter results released today showed that the total mined copper production was 21 per cent higher, compared to corresponding period previous year. The company said that the refined copper production of Kennecott Utah Copper mine recovered to 45300 tonnes, up 169% from second quarter

The company has achieved a record quarterly Pilbara iron ore production of 63 million tonnes in which Rio Tinto share was 50 million tonnes, five per cent higher than the third quarter of 2011. Global iron ore production for the quarter totalled 67 million tonnes in which Rio Tinto share was 53 million tonnes.

In other metals, Zinc forwards were at five week lows on LME. The metal was trading at $ 1920 per tonne, down $ 6 per tonne from Monday. The fall is the result of sharp jump in Zinc inventories. Total Zinc inventories were up by a whopping 24550 tonnes to 1061175 tonnes. Zinc inventories have increased by 29% this year. Most of the rise has been due to the metal used in financing deals with delivery at a later date.