MCX Copper was trading at Rs 450.7 per kg, down 0.27%. The prices of Copper tested a high of Rs 452.5 per kg, and a low of Rs 448.6 per kg.
Copper has fallen almost nine percent in price over the last couple of weeks. In London three-month copper was this morning struggling to hold the $ 6,700 level, a chart area last breached in early April. Global mined copper production surged by seven percent in the first three months of this year, according to the International Copper Study Group (ICSG).
The Groups most recent forecast, made at its April meeting, was for production to rise by a little over three percent this year. For sure, the early year-on-year comparisons are skewed because of low production in Chile and Indonesia last year.
Chilean production rose by 19 percent in the first quarter of 2018, reflecting the 44-day stoppage at the Escondida mine in February-March last year. The biggest single disruption to copper production this year hasnt happened at any mine but at the Tuticorin smelter in the Indian state of Tamil Nadu.
The plant has long been accused of environmental damage by local residents but in May tensions boiled over, resulting in the killing by police of 13 protesters. The smelter has been ordered to close permanently and right now owner-operator Vedanta Resources is struggling to persuade the authorities even to allow basic access to the plant to check a leaking sulphuric acid storage unit. Tuticorin produces around 400,000 tonnes of refined copper per year and its continuing shutdown has significant implications for the Indian copper market and regional flows of refined copper.
With Indian consumption estimated to be running at around 1.5 million tonnes annually, imports will have to increase by at least 200,000 tonnes to fill the gap, according to local consumers. Any resulting tightening in the regional refined copper market will be exacerbated by downtime planned at another smelter, PASAR in the Philippines. The preliminary import figures for China, which have survived the authorities information cull, seem to bear out this displacement effect. Unwrought copper imports were up 17 percent in the January-May period, while those of concentrates were up by 14 percent.