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Commodities Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (April 07, 2014)

April 7, 2014, Monday, 05:14 GMT | 00:14 EST | 08:44 IST | 11:14 SGT
Contributed by Angel Broking


Base Metals

Base metals on the LME apart from Copper traded on a positive note in the last week on the back of speculation that China will add to monetary stimulus to support the economy after manufacturing fell to 8-month low in March. Also, weakness in the DX along with positive economic data from Germany supported gains.

Further, rise in risk aversion in the markets along with mixed trend in inventories could not restrict sharp positive movement. Also, mixed economic data from the US and Euro Zone could not push the prices lower.

In the Indian markets, base metals traded on a mixed note in the last week.


Copper

LME Copper prices fell by around 0.7 percent in the last week owing to weak manufacturing data from the biggest consumers coupled with easing concerns of supply disruption after the mines in the world’s biggest producer, Chile resumed normal operations. Also, weak employment data from the US spurred concerns regarding growth in the second largest consumer, thereby exerting downside pressure on prices. Further, mixed global market sentiments along with mixed economic data from the US and Euro Zone acted as negative factors. However, sharp downside was cushioned on the back of expectations of additional stimulus from China coupled with positive economic data from Germany. Also, decline in inventories by 3.5 percent supported prices.

MCX Copper prices declined by 0.9 percent taking cues from Rupee appreciation and closed at Rs.401.1/kg after touching a weekly low of Rs.400.65/kg in the last trading session.


Outlook

We expect LME Copper prices to trade on a negative note today on the back of weak global market sentiments along with strength in the DX. Also, weak employment data from the US will continue to exert downside pressure on prices as there is no major data expected in today’s trade. Further, Chinese markets remaining closed today on account of bank holiday.

In the Indian markets, Rupee movement will provide further direction to prices.