Copper settled up 0.11% at 399.25 recovered from the multi month's low after news that an investigation into the stockpiles of copper at port in China. There have been rumours that a number of the import orders were duplicated, which could mean oversupply. China’s domestic manufacturing sector is in contraction territory according to the HSBC survey, and if the nation has accidentally overbought copper imports there could be further declines in the price. Overnight, Beijing will reveal CPI and PPI figures; the consensus for which are for readings of 2.4% and -1.5% respectively. If the reports are softer than expected, copper could drop below the 380 mark. Also on Monday, the People’s Bank of China announced a 0.5 percentage point cut in reserve requirements for banks with their proportion of loans issued to smaller enterprises and agriculture meeting requirements, giving a boost to the market. Lastweek copper started the week on the high note after posting the longest slump in four weeks in the week ended May 30. The red metal gained inspiration from a constantly growing demand from China that increased its imports in the last three consecutive months even despite a slowdown in manufacturing activity. The second biggest economy in the world bought 450,000 tonnes of the metal in April, a 7.2% increase from March’s figure of 420,000 tonnes. However, later in the week, copper lost its spree and ended the week with over 3.5% loss. Technically market is under fresh buying as market has witnessed gain in open interest by 0.79% to settled at 25504 while prices up 0.45 rupee, now Copper is getting support at 396 and below same could see a test of 392.6 level, And resistance is now likely to be seen at 401.3, a move above could see prices testing 403.2.

Trading Ideas:

Copper trading range for the day is 392.6-403.2.

Copper settled flat as prices misses rally falling on reports that China was probing suspected fraud involving metal stockpiles in the port of Qingdao.

Weaker than expected Chinese import data also weighed on market sentiment deepening concerns about the pace of economic growth.

China central bank cuts banks' reserve requirement ratio by 50 bps