Copper stocks are buzzing in trade today. A quick look at the list of metal sector stocks indicates that most of the big copper plays like Hindustan Copper, Vedanta, Precision Wires and NALCO are buzzing in trade today. This is after copper prices hit a record high in overnight trade.
The benchmark copper on the London Metal Exchange touched a record high of $14,533 a metric tonne, surpassing an all-time peak of $14,527.50 hit in January, before paring gains slightly. The run-up in the copper price is primarily on the prospect of shortages outside the US spurred speculative fund buying, while the softer dollar reinforced positive sentiment.
Copper climbs higher in MCX trade
Copper Futures are buzzing in early MCX trade as well. The latest Copper futures are up over 1% on MCX. Demand from industrial products and growth in manufacturing activity are seen as key factors helping the growth trajectory.
Copper Futures surge in overnight trade
Though US markets were shut on Monday, the buying in copper was mainly from Commodity Trade Advisor (CTA) investment funds, largely driven by computer programs, but others were holding back, said Alastair Munro, senior base metals strategist at broker Marex, as quoted by Reuters. He added, “Large parts of the discretionary community remain sidelined, wary of getting involved up here with China downstream backing off.”
Analysts also believe that the tariff uncertainty may be supporting copper price and the rates may remain elevated till there is clarity. “It’s hard to know what will happen on tariffs, but the longer there is uncertainty, the longer prices will remain elevated as material flows to the U.S.,” said Albert Mackenzie, an analyst at Benchmark Mineral Intelligence, as per Reuters.
According to him, elevated premiums or backwardations for nearby contracts against longer-dated forwards have attracted some copper back to the LME.
Soft dollar supports copper prices
Moreover,a softer US dollar also supported base metals overall. The Dollar Index is down about 1% in the last 1 month and is hovering around the 98 mark. Earlier in the year, the Dollar Index had surged well above the 100 mark but the hardening of the US yields led to the softening of the dollar rates.
Chinese trade data in focus
Another key factor that the primary base metal and an important industrial component will keep in mind is the Chinese trade data. China’s export growth quickened in August, buoyed by strong overseas appetite for high-tech and AI-related products. Chinese exports to US expanded 25% year-on-year in August.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.