Copper Dented By High Inventories

Copper.....

MCX Copper futures continue to stay under pressure amid failure of the LME Copper to hold on to its gains. The global prices edged up yesterday following reports that troubled nation Cyprus finally reached a deal with its European and international lenders. This calmed worries pertaining to its financing conditions in the short term though the financial markets witnessed renewed selling that such a rescue could turn out to be the blue print for official assistance to the other debt heavy economies too.

It means that the bank depositors in these economies might need to take a substantial haircut in case if these economies also go through the wringer. LME copper has also been hit by decade high inventories and failed to hold on above $7700 per tonne yesterday. The metal now quotes at $7621, down $11 per tonne on he day.

US and European markets fell as the initial euphoria pertaining to the Cyprus bailout wore off. The sentiments in world markets had improved after the cash-strapped European island nation managed to carve out a bargain with the European Central Bank (ECB), the European Commission and the International Monetary Fund — collectively known as the Troika — clearing the main hurdle to securing 10 billion euros ($13 billion) in crucial financing.

Last week, Copper futures edged up on bargain hunting after the spate of selling witnessed earlier. The world equities extended losses as the worries pertaining to Cyprus yet again triggered a sell off though copper benefited from a rather lax undertone in US dollar and ideas that Chinese growth would stay on track.

LME Copper inventories extended their rise though. The warehouse stocks jumped by 2850 tonnes to 565350 tonnes yesterday. The warehouse stocks are currently at a ten-year high. This could keep a tab on the metal today even if the equities extend their rise. MCX Copper futures for April failed to garner much of gains and slipped from highs near Rs 420 per kg. The counter quotes at Rs 415.60, down Rs 0.50 per kg on the day with 3% increase in the open interest.
Source by Commodity Insights