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.