Domestic copper armature prices fell steeply by over 8% to INR 571,000/t ($7,201/t) today, as against INR 625,000/t ($7,882/t), exy-Delhi, on 5 July. Copper primary and secondary wire rod prices also fell sharply by 8% and 8.65% to INR 628,000/t ($7,920/t) and INR 612,000/t ($7,718/t), exw-Delhi, respectively.
The copper market has been seeing a downtrend on a d-o-d basis, owing to the following reasons:
- Falling exchange prices: Exchange prices play an important role in determining spot commodity prices. Falling copper prices on high-profile commodity exchanges like the London Metal Exchange (LME) and Multi Commodity Exchange (MCX) are driving down domestic prices.
Copper three-month contract prices on LME fell 4.2% to $7,670/t on 5 July, as against $8,006/t in the previous trading session.
On MCX too, copper futures contract prices fell by 1.05% to INR 644,400/t ($8,121/t) on 6 July, as against INR 651,250/t ($8,213/t) on 5 July.
- Seasonal slowdown: With the monsoon’s arrival into India, construction activities have slowed down. As a result, adequate copper demand, in the form of electrification usages, could not be generated, owing to which domestic prices are trending lower.
- Low demand: Domestic demand is slow, as per market participants and this is also a reason for the fall in prices.
- Less liquidity: As the dollar has crossed the INR 79 mark, inflation is on the higher side in India at present. Liquidity concern are emerging in the market. As a result, buyers are procuring material in very limited volumes. Thus, prices in the domestic market are on the lower side.
Near-term outlook : There are limited booking queries for the coming months, as per market participants. It is expected that the bearish trend will continue in the near term.
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