Copper to stay at $7500- 8500/ tn in next 2 mths

Copper prices seem headed northward, to remain in the range of $7,500-8,500 a tonne for the next two months, though the market is highly volatile at present.

The prices are expected to rule high on account of the maintenance season ahead and the continuance of the labour problem in Mexico.

The September-October season is considered the maintenance season, when most international mines are shut down for 15-30 days for maintenance. So, the availability of global copper usually falls during this period and, hence, leads to higher prices.

Generally, the prices rise about 8-10 per cent during this season, but this year, they are likely to move up even higher, within a range, a local trader said.

Looking at the most recent trend, international price movement has not percolated to the domestic market as the physical copper players in the domestic markets have adopted a wait and watch approach to restart their units, which they had closed a year ago owing to spiralling raw material costs.

The red metal on the London Metal Exchange surged by $205 to $7,870 a tonne on mid-Friday from $7,665 on Monday. This price jump is mainly attributed to falling inventory "� at 1,25,150 tonne on Friday from 1,28,100 tonne on Monday.

In comparison, the price of copper wire bar slumped to Rs 410 from Rs 416 a kg during the week. Moving in tandem with virgin copper price, cable scrap fell by Rs 6 to Rs 382 a kg and heavy scrap by Rs 5 to Rs 370 a kg.

Copper armature recorded the highest dip of Rs 9 to Rs 355 a kg, while utensil scrap and sheet cutting declined by Rs 7 to Rs 350 a kg during the week.

"The availability of copper scrap is tightening because primary producers have started using scrap and secondary as inputs owing to skyrocketing prices," said Surendra Mardia, senior vice-president, Bombay Metal Exchange. Another reason for price decline in the domestic market is the lack of voluminous trade. Today, only distrous trades are taking place and physical market price is determined on the basis of limited trade taking place by a handful of traders. Hence, it is difficult to say that the current price is realistic, Mardia said. Import has become very tough today because of mandatory registration with the Director General of Foreign Trade (DGFT). Therefore, only keen businessmen are trading today, Mardia added.