Mumbai: Indian copper futures rose on Wednesday on falling inventories and as a weak dollar spurred buying, but traders were cautious ahead of some macroeconomic data from the US, analysts said.
“Some data is awaited from the US and expectations are positive for copper. We can see a slight upward correction today,” Vinod Maloo, an analyst with Indiabulls Commodities Pvt. Ltd, said.
Traders eyed the February durable goods orders and new home sales data from the US due later on Wednesday, which could provide a clear indication about demand for industrial metals in the world’s largest economy, analysts said.
At 3.20pm, the most active copper for April delivery on the Multi Commodity Exchange of India traded at Rs327.30 a kg, up 0.77% from the previous close. It has risen nearly 21% since the start of the year on falling inventories and as a global stock market rout prompted funds to pump money into commodities, primarily metals and energy.
Resistance for the April contract was pegged at Rs327.40, a breach of which could see prices at Rs330.30 and then at Rs332.40, Maloo said.
Copper stocks on the London Metal Exchange warehouses fell by 2,125 tonnes on Wednesday to 118,050 tonnes, down about 40% since the beginning of January.
Expectations of higher copper demand in the second quarter of 2008 due to seasonal buying could support prices, Tejas Seth, an analyst with Motilal Oswal Commodities Broker (P) Ltd said. Copper is expected to be rangebound through the day, though traders may reap profits ahead of the US data, he said.
A good level to buy copper was Rs322.70, with a target of Rs332, analysts said. Meanwhile, zinc futures fell on Wednesday on concerns of higher global supplies and analysts expected the metal to touch new lows in the medium term. The most-traded March zinc was quoted at Rs92.90, down 0.43% from the previous close. “Sell on rise should be the strategy for zinc,” Seth said. “Copper will help pull up zinc, but I will not be surprised if it touches new lows. It can fall below Rs85.”