The fundamental outlook of base metal complex and copper continues to remain bullish, said Nirmal Bang’s Kunal Shah.

Speaking to CNBC-TV18, Shah said, “US infrastructure stimulus is a big catalyst for commodity market and especially for base metals and ferrous metals. After the COVID crisis, most of the capacity is going to come out of China, and all this new infrastructure is going to create massive demand of industrial commodities in next 6-10 months. So, the outlook for demand remains very bullish.”

On the supply side, Shah said that the more than 450 mines in South America were not operating at their full capacity due to the COVID-19 crisis.

“So, the supply side continues to remain weak. The outlook is very bullish going forward for the entire base metal complex,” he said.

Shah expects copper demand to grow at least by 7-8 percent CAGR going forward.

“So, I am expecting copper prices to move up from present levels. Rs 682-683 are good levels to go long and for a target of Rs 695-700 and a stop loss should be at Rs 675,” he said.

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(Edited by : Ankit Gohel)