Copper may stay weak in short term

Latest revision is attributed to general global meltdown

Copper is expected to remain weak in the short term "� for the next three months "� in line with general global meltdown reflected on the London Metal Exchange (LME).

Early this week, the red metal, on the LME, slipped below $6,800 a tonne from $7,730 a tonne on June 1.

"There has been no change in cost of production, at $3,000 a tonne, despite copper remaining stable at around $7,000 a tonne for the last 10 days. Hence, the recent shooting up of prices because of occasional (market manipulated) demand is not justifiable and the red metal has to come down to $4,500 in the next three months," Surendra Mardia, a Mumbal-based copper trader, said.

Inventory, too, declined by 18,100 tonne so far this month to 93,000 tonne, from the 1,11,100 tonne level in the beginning of the month. Copper on warrant also fell to 85,350 tonne from 92,700 tonne.

"The downfall is the consequence of long liquidation and smooth working of copper miners and processors," another trader said.

Meanwhile, data from International Copper Study Group showed a surplus of 15,000 tonne for March and 64,000 tonne for January-March, rising to 150,000 tonne on a seasonally adjusted basis.

Following the meltdown, Hindustan Copper (HCL) today slashed its product prices by 10 per cent with immediate effect.

HCL usually revises its prices in the beginning of every month, but the Chile tremors forced to cut product prices before time. With this downward price revision, 8 mm rod is quoting at Rs 3,56,700 a tonne against Rs 3,95,000 a tonne in the beginning of the month. Rods of 11 mm, 12 mm, 15 mm slipped to Rs 3,58,600 from Rs 3,96,900.

Prices of cathode full and cut came down to Rs 3,51,000 and Rs 3,52,500 from Rs 3,89,300 and Rs 3,90,800, respectively. Similarly, copper wire bar full slumped to Rs 3,57,900 from Rs 3,96,100 in the latest revision.

Excise duty, education cess, sales tax, octroi and other statutory levies will be charged extra from the customer as applicable.

"Although we are not affected by the mid-month price revision as the final prices are known only at the month-end, the prices that the customer pay at the time of sourcing copper are very important," a trader said.

In the domestic spot metal market, copper wire bar sank to Rs 368 a kg from Rs 408 a kg on June 1.

In the stable to diminishing market today, the existing formula to source copper is not working and the consumer always prefers buying on the spot.

Hence, the current downward price revision by producers will attract the seasoned buyer, who, otherwise, may prefer imports, Mardia said.

Earlier, copper climbed 1.8 per cent after an overnight earthquake in world No.1 copper producer, Chile.

However, as dealers said it was unlikely to have caused damage to mines in the region, the earthquake would not have any appreciable impact on copper prices.