LME three month prices of Copper were lower on the back of weak Chinese production data and concerns on economic slowdown in the country. Chinese banks are refraining from giving letter of credit to small copper imports thereby halting the funding. This not only is impacting the imports it is also quite negative from the value point of view.
Meanwhile other problem with metals is the attractiveness of equities over commodities at current juncture. Oversupply burden has already chopped Copper to 18 month lows earlier this year. LME Copper inventories closed at 629950 tonnes against 606700 tonnes at the beginning of the week, up 3.8 percent.
LME Copper was trading at $ 7270 per tonne on Monday, against $ 7349.5 per tonne last week. Most active Copper contract on MCX closed the last week trading at Rs 405.6 per kg, up 0.1 percent in the week. Downtrend can take Copper towards Rs 401 per kg in the upcoming trading sessions. Resistance for the contract is at Rs 409 per kg.
Last week, COMEX Copper fund managers, Commitment of traders report for week ending 14 May 2013 showed decline in the short positions while there was concurrent minor increase of long positions by hedge fund managers. The total short positions declined by 3064 contracts taking total short contracts number to 40667 contracts from 43731 contracts in the previous week.
COT report showed that long contracts increased by 568 contracts and were at 27503 contracts from 26935 contracts a week before. Total net short positions therefore moved to 13164 contracts on 14 May from 16796 contracts a week before.
Source by Commodity Insights
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