MCX Copper may note some decline tracking cues from international exchange but buy on dips is suggested.LME Copper trades marginally lower after 2.5% gain yesterday. Profit taking after yesterday’s gain and position squaring ahead of Chinese Lunar New Year holidays has put pressure on copper price.
However, supporting price are supply concerns amid strike worries in Chile. As per latest reports, the main union at BHP Billiton’s Escondida copper mine, the world’s largest, said the company’s latest offer is “irresponsible” and it will recommend its 2,500 workers begin a strike.
BHP Billiton yesterday revised its copper output for current fiscal year by 2% to 1.62 million tonnes. Concerns about Chinese supply rose yesterday as it plans to close aluminum plants to combat pollution. Also supporting price is sharp recovery in equity market amid optimism about US and global economy. However, this is offset by uncertainty about Trump’s economic policies.
Decline in stocks at exchange warehouses has also lent support. Stocks at LME warehouses fell by 2500 tonnes yesterday. With no major economic event today, copper may remain supported by supply worries relating to Chile. Support for MCX Copper February contract is seen at Rs.400 while resistance is seen at Rs.411.