The red metal surged 15% on LME, going as high as $6,732, which is a 13 month high. Copper has been well supported by factors like China's economic growth, and ongoing production problems at BHP's Spence mine in Chile (due to failed wage negotiations). At the same time, imports data shows that China’s imports of refined copper rose 28.7% as compared to August. However, the rise in buying interest comes, despite the Chinese market being well supplied. Chinese economy surged 8.9% in the third quarter and retail sales and other indicators were robust in September. China has been the key driver of the entire base metals complex and majorly for Copper that sways the momentum of the entire complex, while improving global economic conditions are highly supportive. The outright restocking of supplies, which would drive demand, is unlikely to happen until next few months. Stocks in Shanghai had decreased around 1% during the month but declined around 4% previous week, which provided further support to the acceleration in the prices. Copper prices corrected in the beginning of the month and tested a low of Rs280.80/kg to find support in that range. As expected, buyers came in full swing to buy in to the metal at lower levels. This has pushed up the metal to surpass it s major resistance of $6550/t in LME and touch new highs for the year of around $6710/t, but due to steep appreciation in INR, copper has not been able to break above its immediate resistance of Rs319.20/kg in MCX, which is still the established high of the year. After the much needed correction, red metal formed a double bottom pattern in Daily charts at $5800/t in LME, which envisages quite higher price targets for the counter in the coming days. Moreover the counter is also representative of bullish Flag pattern on Daily charts and has already given a breakout so we expect it to strengthen further and form new highs for the year of around Rs347/kg in coming days after a brief period of correction and consolidation.

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