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Commodities Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (August 01, 2014)

August 1, 2014, Friday, 07:01 GMT | 02:01 EST | 10:31 IST | 13:01 SGT
Contributed by Angel Broking


Base Metals

Base metals on the LME traded largely traded on a negative note yesterday on the back of weak economic data from the US and a stronger DX which dampened hopes for improving base metal demand in the second biggest consumer that was boosted on Wednesday by a strong second-quarter GDP figure. Also, gain in LME inventories of all metals except Copper acted as a negative factor.

Zinc prices declined as inventories rose, highlighting an overhang of supplies that needs to be eroded before mine closures create an expected shortage and Nickel prices slipped after stocks touched another record high.

In the Indian markets, all the base metals except Copper traded on a negative note taking cues from weakness in international markets.


Copper

LME Copper prices fell by 0.4 percent yesterday in anticipation of manufacturing data from China. Also, unfavorable economic data from the US exerted downside pressure on prices.

However, decline in LME inventories by 0.8 percent along with positive economic data from Euro Zone restricted sharp fall in prices. The red metal closed the session at $7103/tonne in the last session.

MCX Copper prices gained 0.3 percent taking cues from Rupee depreciation and closed at Rs.436.1/kg on Thursday.


Outlook

We expect LME copper prices to trade on a positive note today as China’s manufacturing expanded in July at the fastest pace in more than two years, signaling a pickup in economic growth in the biggest consumer. Also, consistent decline in inventories this week which had pushed stockpiles to 6-year lows will act as positive factor.

Further, estimates of positive manufacturing and consumer confidence data from the US in the evening session will support gains.

MCX Copper prices will trade on a positive note today taking cues from strength in international markets.

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