Friday, 19 April 2013

MCX Copper Recovered On Thursday After Bottom Fishing


MCX Copper recovered lost ground on Thursday after bottom fishing kicked in the markets. This was another day when the LME and MCX Copper prices showed divergent moves. Earlier as well, Indian Rupee was creating difference in the prices of Copper and peers.
The medium term Copper moves are still vulnerable to sharp recovery. Copper futures on MCX ended at Rs 381.6 per kg, up 0.07 percent. The prices tested an intraday low of Rs 368.6 per kg and a high of Rs 383 per kg. Indian metals will open for the evening session, day trades are closed on account of Ram Navmi.
LME Copper three month prices of Copper slipped to $ 6955 per tonne, down $ 95 per tonne. The metal has further receded to $ 6985 per tonne on Friday. The problem with Copper prices at the moment is it nearness to cost of production. Some of the major Copper mines cost of production is $ 2.8 per pound that is equivalent to $ 6100-6200 per tonne cost. Decline in Copper prices further will minimize the incentive of producing metal. This can also bring some of the mine production in danger.
A factor that can support copper if prices fall from current levels is the drop down of production that will eradicate surplus metal from the markets. Moreover, Kennecott Utah mine of Rio Tinto that was damaged due to landslide in open pit area will remove 100000 tonnes of metal from market in 2013.
China has already missed the forecast for 8 percent growth in the first quarter. Even for the full year the growth rates in the country is revised down. China is a major consumer of copper. The China consumes 44 percent of World Copper.
In other news, Anglo America said that the Copper production for first quarter ending 2013 was 170400 tonnes, up 1 percent from 168400 tonnes from first quarter ending 2012. Copper production for the fourth quarter ending 2012 was 172900 tonnes.
Production from Los Bronces increased by 5% to 98,300 tonnes, with higher throughput at both plants offset by expected lower ore grades. This higher throughput also resulted in a 3% production increase compared to Q4 2012. Collahuasi's production decreased by 13%, owing to lower grades and the commencement of a 45 day planned shutdown of SAG Mill 3 on 21 March.
During the quarter, SAG Mill 3 operated at reduced capacity ahead of the planned shutdown. This mill is responsible for approximately 70% of plant throughput at Collahuasi. Production at El Soldado increased by 16%, as a result of expected higher grades and improved recoveries
Source by Commodity Insights

No comments:

Post a Comment