Date: December 07, 2010

Copper Insight
Date: December 07, 2010

Copper Review

After yesterdays choppy trading today copper has gained by 1.25% on LME and trading at Euro 8870/MT level over
the concern of falling inventories and expectation that demand will outpace supply in coming days.Weakening dollar
also pushing the base metal prices amid of slow global recovary.

Fundamental Analysis
LME Copper Inventories

The biggest slump in copper inventories in six years is compounding shortages as prices head toward record highs,
making the metal more attractive for investment.Demand will outpace supply by 367,500 metric tons next year,
enough for wires, pipes and appliances in about 1.8 million U.S. homes, according to the median forecast of
Bloomberg. Global exchange inventories have dropped 22 percent this year,heading for the largest slide since 2004.

Alongside chart showing the

inverse relation between LME
copper Inventories and copper
prices.

Since July 2010 Inventories

start falling moving prices
higher and higher.
 Date: December 07, 2010

Mine Production

Production at Escondida, the world’s largest copper mine,will drop as much as 10 percent in the 12 months
ending in June because of lower grades, Melbourne-based BHP Billiton, the largest shareholder, said in a
statement Aug. 25.

The major copper reserves that are being produced today come from 100 year-old mines, with few
exceptions,which is indicating that possibility of reduction of production is high.

Demand

Aurubis AG, Europe’s largest smelter, is also predicting higher demand next year as they are getting good orders
flow. Consumption in China, India, Brazil and the Middle East will expand at an average annual rate of 7 percent
per capita through 2015.

Demand may also be boosted if JPMorgan, BlackRock Inc. and ETF Securities Ltd. start exchange-traded products
backed by the metal. Such funds could hold as much as 250,000 tons.

Technical Outlook

Above copper daily chart on MCX has formed the symmetrical triangle( cont.) chart pattern and given upside
breakout. We are expecting it to touch Rs 408/410 levels in coming days.
 Date: December 07, 2010

Recommendations:
Commodity Contract Support Resistance recommemdation
Copper MCX Feb 28 396 412 BUY COPPER at 400-401 STOP 396
Copper comex Dec 10 395 412 TARGET 408-410
Copper LME Fwd 8700 9000

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