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Commodities Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (August 11, 2014)

August 11, 2014, Monday, 05:02 GMT | 00:02 EST | 08:32 IST | 11:02 SGT
Contributed by Angel Broking


Base Metals

Base metals on the LME apart from Copper and Zinc traded on a positive note last week owing to fall in unemployment claims data from the US.

Nickel prices rose to a 1-1/2 week high lifted by the closure of a mine in Papua New Guinea and the prospect that wider Western sanctions against Russia could soon affect the major producer of the metal.

However, weak services data from the biggest consumer, China restricted sharp gains. In addition, a stronger DX along with weak economic data from the Euro Zone exerted downside pressure on prices.

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


Copper

LME Copper prices declined more than 1 percent last week as China's copper arrivals fell 2.9 percent month-on-month in July, falling for a third straight month as small importers have delayed some term refined copper shipments since June owing to local banks cut lending following a probe into an alleged metal financing scam. Also, Freeport-McMoRan Inc's FCX.N Indonesia unit has completed its first copper concentrate export shipment since the country's introduction of new mining rules posed supply glut concerns.

Further, growth in China's services sector slowed sharply in July to its lowest level in nearly nine years indicating a recovery in the broader economy is still fragile and may need further government support. Also, weak global market sentiments coupled with strength in the DX exerted downside pressure on prices.

MCX Copper prices plunged by 1.2 percent last week in line with weakness in international markets and touched a weekly low of Rs.429.1/kg before closing at Rs.429.9/kg.


Outlook

We expect LME copper prices to trade higher today as appetite for risk grew taking cues from Russia's defence ministry statement on Friday that it had finished military exercises in southern Russia, which the United States had criticized as a provocative step amid the Ukraine crisis.

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