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Commodities » Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (August 06, 2014)

August 6, 2014, Wednesday, 06:16 GMT | 01:16 EST | 10:46 IST | 13:16 SGT
Contributed by Angel Broking


Base Metals

Base metals on the LME traded largely traded on a negative note as Services PMI data from China fell to the lowest level in nine years. Also, mixed market sentiments along with strength in the DX exerted downside pressure on prices.

Further, favorable economic data from the US and Euro Zone could not restrict sharp downside on prices.

In the Indian markets, all the base metals traded lower taking cues from weakness in international markets.


Copper

LME Copper prices slipped by 1.3 percent yesterday as China's services sector slowed to its lowest level in nearly nine years, raising concerns about the demand outlook from the world's top metals consumer. Further, rise in risk aversion in the market sentiments in the latter part of trade after Poland’s foreign minister warned that a renewed buildup of Russian troops on Ukraine’s border may signal an invasion as President Vladimir Putin ordered a response to U.S. and European sanctions exerted downside pressure on prices.

In addition, decline in inventories by 0.4 percent coupled with positive economic data from the US and Euro Zone could not provide respite to prices. The red metal touched an intra-day low of $7042.75/tonne before closing at $7050.8/tonne in the last session.

MCX Copper prices plunged by 1.3 percent in line with trend in international markets and closed at Rs.433.1/kg on Tuesday.


Outlook

We expect LME copper prices to trade on a negative note today on the back of demand concerns from the biggest consumer, China and escalating violence in Ukraine.

However, estimates of favorable German factory orders and UK manufacturing production data will restrict sharp downside.

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