Copper prices on the London Metal Exchange rose to a one-month high of $13,391.6 per tonne as the prospect of US-Iran peace talks boosted sentiment and improved risk appetite. The momentum was further supported by rising demand related to electrification and a positive outlook for Chinese consumption.
The price was further aided by the strong demand from smelters in China as the latest trade data showed copper ore and concentrate imports rose 6.6% on year to 7.5 million tonnes.
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Copper extended gains supported by both macro conditions and positioning. The latest Commitments of Traders data showed an increase in speculative net longs after three weeks of stabilisation, reinforcing the view that the market is rebuilding directional conviction, Sucden Financial said in a note to clients. "The price action suggests continued upside potential if the current macro environment holds," it added.
On the technicals, the trend has turned positive as the price moved above all the key averages on the simple and exponential moving averages on the daily chart. The momentum oscillator, Relative Strength Index, is at 66.62, suggesting further upside in price, as it is used by traders to measure recent price changes and analyse overbought and oversold levels.
Traders increased their bullish bet on the Multi Commodity Exchange of India to 9,474 lots. For further cues, investors look forward to the US producer price index later in the day.
Overall, the base metals complex remains constructive, with improving macro conditions supporting further upside, although momentum remains dependent on the stability of the broader narrative, Sucden Financial said.
Aluminium prices rose as traders liquidate their bearish positions on the domestic exchange. Lead contracts edged higher as market participants covered their short positions on the MCX. Zinc contracts traded at day's high as market players unwound their short positions on the domestic bourse.
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At 2.20 pm, on the MCX, the April futures contract of:
-Aluminium was at Rs 367.35 a kg, up 0.1%
-Copper was at Rs 1,281.10 a kg, up 1%
-Lead was at Rs 195.30 a kg, up 0.2%
-Zinc was at Rs 336.55 a kg, up 0.4%
Trading levels for the day on the MCX:
--Aluminium contract seen at Rs 362-Rs 370
--Copper contract seen at Rs 1,270-Rs 1,291
--Lead contract seen at Rs 192.65-Rs 197.75
--Zinc contract seen at Rs 333.30-Rs 338.50.
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