LME Copper Holds Above $8000, Support 7950: April 22, 2012

Copper prices holds the ground and traded above $8,000 after consolidating form recent sharp losses as macroeconomic concerns supported the prices. LME Copper traded above $8,050/t today, and INR 418 at MCX as successful French and Spanish bond auctions eased some fears over the eurozone debt crisis however weaker US economic data kept some check on prices.

US jobless claims and homes sales numbers fell unexpectedly which indicates lower demand of copper in US. Further, copper prices are also getting support from optimism for more Chinese monetary easing via cutting RRR. We may see some rebound in base metals whereas copper has support resistance at $8250 and 422 while support lies at $7,950 and 413. Lead and zinc prices are also expected to hold their earlier gains.

Crude Oil Steadies Below $103 On Positive Spain Bond Auction

Crude oil futures traded steadied below $103 on positive Spain bond auction and weak US job market and housing data. The Brent‐WTI spread widen to $15.50 from $14.50 after Brent oil prices rose after Spain and France meet maximum target in bond auction.

Natural gas prices fell almost 2% traded near $1.91 on bearish inventory data. We expect oil prices to trade sideways to up on positive EU economic sentiment. The speculation over QE3 may also kept momentum in oil prices holding a narrow range in absence of any key economic data in the evening session. Crude oil has important resistance at INR 5435 and support at INR 5350.

MCX Mentha Oil Plunges On Higher Sowing

Mentha oil futures corrected on consecutively for the third day on Thursday hitting the 4% circuit breaker on account of selling seen at higher levels and increasing of the arrivals due to liquidation of stocks at the end of the current marketing year and of reports that the acreage may increase for the next marketing year by around 20% on higher realisation. The spot as well as the futures settled lower by 2.73% and 4% respectively.

Total special cash margin of 25% on the long side has been imposed on all contracts of mentha oil from March 9, 2012. For detailed reference please refer to the Circular No: MCX/T&S/074/2012 dt 06/03/2012.

Production, Arrivals And Exports

According to market sources, sowing of mentha in Western UP is expected to increase by 30% as compared to last year, while sowing in all regions is expected to increase by 20%.

Arrivals in entire UP stand around 130 drums (1drum – 180 kgs) daily. Exports of mentha during April 2011 to January 2012 witnessed a decline of 6% to 12,850 tonnes as compared to 13,550 tonnes in the same period last year.