Metals are finally doing well. Some buying opportunity is seen coming on the lower side, especially for copper prices.
In the last couple of sessions, copper was trading at nearly one-month low but a smart recovery has been seen in the New York session on Monday and Asia seems to be doing some follow-through buying there.
There has been a decline in LME inventories and now in the past three months, inventories have declined by 40 percent.
The spread between spot and three-month contract is at a three-month high of $120 per tonne, which indicates that there is a near-term tightness into the market and that is the reason this premium has been on the higher side.
Cancelled warrants are at 28 percent, which means the on-ground demand picking up.
Markets are also looking at the elections in Chile this weekend. Chile is the second-largest producer of copper in the world. So, there is a bit of uncertainty coming in from there as well.
Market analysts believe that copper prices will continue to be choppy because demand from China property market is still weak, the strength in US dollar will also weigh on.
In the next six months, there could be some kind of a balance coming in because many of the mines are ramping up, so there would be a breakeven.
In the next three-six months, the expectation is that copper will be in the range of $8400 per tonne on the lower side and $10,000 per tonne on the higher side.
Watch the accompanying video of CNBC-TV18’s Manisha Gupta for more details.