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.