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Commodities Industrial Metals

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

August 7, 2014, Thursday, 07:27 GMT | 03:27 EST | 11:57 IST | 14:27 SGT
Contributed by Angel Broking


Base Metals

Base metals on the LME traded on a negative note yesterday owing to rise in risk aversion in the markets spurred by escalating tensions between Russia and Ukraine. Also, a stronger DX and weak economic data from the Euro Zone and UK acted as negative factors.

MCX base metals traded lower in line with weak trend in the international markets.


Copper

LME Copper prices fell to the lowest level since June amid signs of faltering Europe’s economic recovery as Italy unexpectedly returned to recession and factory orders dropped the most since 2011 in Germany, the world’s third-largest copper user. Also, weak global market sentiments coupled with strength in the DX exerted downside pressure on prices.

Further, decline of 0.8 percent in inventories could not restrict downside in prices. The red metal touched an intra-day low of $6951.75/tonne before closing at $6966.8/tonne on Wednesday.

MCX Copper prices declined by 0.7 percent in line with weakness in international markets and closed at Rs.429.9/kg


Outlook

We expect LME copper prices to trade lower today as rising risk aversion owing to tensions between Russia and Ukraine along with concerns of weak Chinese demand will be a drag for prices. also, concerns of additional supply after Freeport copper exports resume will continue to exert downside pressure on prices.

However, sharp fall will be cushioned owing to favorable German Industrial Production data.

In the Indian markets, base metals will trade on a negative note taking cues from weakness in international markets.

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