India copper futures steady on rupee, demand

MUMBAI Jan 5 (Reuters) - India's copper futures traded steady on Monday, after gaining more than 10 percent last week, as pressure from sluggish demand was offset by a weaker rupee, analysts said.

A weaker rupee supported the red metal as it made the dollar-denominated asset more expensive, while demand concerns dragged the metal down.

At 3:17 p.m., three-month copper on the London Metal Exchange MCU3=LX was at $3,194 a tonne, after falling to $3,157 earlier in the day, compared with Friday's close of $3,210.50.

"Copper looks bullish on technical grounds, and as LME copper is holding above $3,100 per tonne level," said Somnath Dey, in-charge, metals and energy research at Religare Commodities.

However, investors remained concerned about waning demand for industrial metals amid a deepening global recession and rising inventory levels, analysts said.

Copper stocks in warehouses monitored by the LME were higher by 1,500 tonnes at 342,050 tonnes on Monday.

Investors will be closely watching U.S. auto sales figures for December, due later in the day, and November durable goods and factory orders on Tuesday for direction in the base metals complex.

Meanwhile, China will resume a tax-free policy on imports of concentrate for copper, nickel and cobalt from Feb. 1, a statement on the Ministry of Commerce's website said. (www.mofcom.gov.cn) see [ID:nHKG338921]

The country will also resume the policy on exports of refined copper and nickel, as well as on semi-finished aluminium profiles.

At 3:46 p.m., the benchmark copper February contract MCCG9 traded 0.16 percent lower at 158.40 rupees per kg, after falling to 153.7 rupees earlier in the session.

The benchmark February copper contract MCCG9 ended the last session at 158.65 rupees per kg, after gaining 10.1 percent last week.

The charts are showing a bullish pattern after copper breached the 150-rupee-level, said Amrut Deshmukh, a technical analyst at Way 2 Wealth Securities. Buying is recommended at 156 rupees with a target of 177 and with a stop loss of 151 rupees, Deshmukh added.

At 3:46 p.m., January zinc MZIF9 was 0.16 percent higher at 61.95 rupees per kg, while January lead MLDF9 was lower by 0.37 percent to 53.75 rupees per kg.

(Reporting by Siddesh Mayenkar; Editing by Sunil Nair)