Monthly Outlook Report (May 2009) for Copper: Nirmal Bang

Monthly Outlook Report (May 2009) for Copper: Nirmal BangCopper is moving in the Uptrend in the medium term.

Copper is expected to move up from the support line at 220.

Copper can move up to 260-65, if crosses the earlier high at 242 levels.

One should maintain a stop-loss of 208 in the buy position in copper at 215-20 levels, targeting 242 and 265.

Market News:

Copper production at Chile's Escondida mine, the world's largest, slumped 45% in the first quarter from a year ago to 156,400 tonnes, part-owner Rio Tinto Ltd PLC said on Wednesday.

China, the world's top consumer of copper and a net importer of the metal, produced 319,400 tonnes of refined copper in March, which went up 5.2% from a year earlier, data from the National Bureau of Statistics showed.

Brazilian miner Vale, the world's largest iron ore producer, recently said it would cut its global nickel output to adjust to flagging demand for the metal due to the slowing world economy. Cuba's three nickel processing plants remain open despite low international prices, state-run radio said in a report that urged workers to improve efficiency.

The world copper market is expected to see a surplus of at least 345,000 tonnes in 2009, growing to around 400,000 tonnes in 2010, the International Copper Study Group (ICSG) said.

The global zinc market will be in a surplus of just over 260,000 tonnes this year as demand records its biggest fall since 1975, the International Lead and Zinc Study Group (ILZSG) said. The global lead market will be in a 37,000-tonnes surplus this year, the International Lead and Zinc Study Group (ILZSG) said.

The World Steel Association's short-term forecast is that the global steel demand for 2009 might witness a fall of up to 15% from 2008, the steepest since World War II, citing global economic downturn as the cause. The global nickel market will be in an 80,000 tonnes surplus in 2009, as falling demand continues to outpace cutbacks made by producers, the International Nickel Study Group (INSG) said. It expects world production to fall to 1.26 million tonnes this year (from 1.39 million tonnes in 2008) and consumption to fall to 1.18 million tonnes from 1.29 million in 2008. It doesn't anticipate a recovery in the primary nickel demand and stainless steel production until the second half of 2009.