MCX Copper Falls as US Tariffs Take Effect, Defying Global Market Trends
MCX copper futures declined on Tuesday, with the September contract settling at Rs 888.50 per kg, down 0.23%. This coincided with the implementation of 50% US tariffs. Global copper prices showed strength, with COMEX copper rising 0.53% and LME three-month contracts increasing by 0.74%. The decline occurs amidst evolving US-India trade dynamics, including a cancelled visit by US trade negotiators to New Delhi. Copper demand remains robust due to electrification efforts, EV adoption, and data center growth, while supply constraints persist. Technical analysis shows support at Rs 866.00 and resistance at Rs 890.00 for MCX copper.
*this image is generated using AI for illustrative purposes only.
MCX copper futures experienced a decline on Tuesday, with the September contract settling at Rs 888.50 per kg, down 0.23%. This downturn coincided with the implementation of 50% US tariffs, which came into effect from midnight Wednesday. The local market's movement contrasted with the positive sentiment observed in the international copper market.
Global Copper Market Trends
Despite the dip in MCX copper, global copper prices showed strength:
- COMEX copper prices rose 0.53% to $4.48
- Three-month contracts on the London Metal Exchange (LME) increased by 0.74% to $9,796.50 per metric ton
US-India Trade Relations
The decline in MCX copper prices comes amidst evolving US-India trade dynamics:
- A planned visit by US trade negotiators to New Delhi was cancelled
- The implementation of 50% US tariffs is likely to impact trade relations between the two countries
Currency and Monetary Policy Impact
The copper market is also being influenced by broader economic factors:
- Dollar-priced commodities, including copper, gained support from a weakening greenback
- Federal Reserve Chair Jerome Powell hinted at possible rate cuts, contributing to dollar weakness
Copper Demand and Supply Dynamics
Despite short-term price fluctuations, the copper market continues to be driven by strong fundamentals:
Demand remains robust due to:
- Ongoing electrification efforts
- Increasing adoption of electric vehicles (EVs)
- Expansion of power grids
- Growth in data center infrastructure
Supply constraints persist, stemming from:
- Tight inventories
- Disruptions in mining operations
Technical Analysis
From a technical perspective, MCX copper is showing key levels of support and resistance:
| Level | Price (Rs) |
|---|---|
| Support | 866.00 |
| Resistance | 890.00 |
The copper market continues to navigate a complex landscape of global trade tensions, monetary policy shifts, and robust demand-supply dynamics. Investors and traders are closely monitoring these factors as they impact both local and international copper prices.
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