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Informist, Tuesday, Jul. 1, 2025

By Ashutosh Pati

MUMBAI – Futures contracts of copper rose on the Multi Commodity Exchange of India, tracking a rise in contracts on the London Metal Exchange because of the weaker dollar. Market sentiment was also lifted by strong economic data from China.

COPPER prices surged to an almost four-month high of INR 903 per kg on the MCX earlier in the day. At 1611 IST, the dollar index, which measures the strength of the greenback against a basket of six currencies, was down 0.3% at 96.46. A weaker dollar makes dollar-denominated commodities, like copper, cheaper for those holding other currencies. This, in turn, gives demand a leg-up.

China's Caixin manufacturing Purchasing Managers' Index rose to 50.4 in June from 48.3 in May, beating analysts' expectations in a Reuters poll. A reading below 50 indicates a contraction in economic activity while a number above 50 signals an expansion. Moreover, copper stocks globally are depleting as traders are moving the metal to the US ahead of potential tariffs.

"It is difficult to say how long the trend will continue," Thu Lan Nguyen, head of FX and commodity research at Commerzbank, said in a report. "But one thing is clear: it threatens to come to an abrupt end as soon as US import demand slows down. And that is likely to happen sooner or later. After all, the increase in imports is not a reflection of a sustained rise in demand, but is primarily due to fears of the introduction of US import tariffs on copper."

US President Donald Trump had ordered the Commerce Department in February to investigate the threat copper imports pose to national security and suggest ways to mitigate it. The mitigation efforts include "potential tariffs, export controls, or incentives to increase domestic production", according to the order.

At 1630 IST, on the MCX, the July futures contract of:

-–ALUMINIUM was at INR 249.55 a kg, up 0.3%

–-Copper was at INR 898.30 a kg, up 0.4%

–-LEAD was at INR 180.55 a kg, down 0.1%

–-ZINC was at INR 257.00 a kg, down 0.5%

Trading levels for the day on the MCX:

--Aluminium contract seen at INR 246.20-INR 251.30

--Copper contract seen at INR 892.00-INR 906.00

--Lead contract seen at INR 179.00-INR 181.80

--Zinc contract seen at INR 247.00-INR 252.00

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Rajeev Pai

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