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Commodities Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (August 14, 2014)

August 14, 2014, Thursday, 07:04 GMT | 03:04 EST | 11:34 IST | 14:04 SGT
Contributed by Angel Broking


Base Metals

Base metals on the London Metal Exchange (LME) traded lower yesterday following the release of disappointing economic data from China. Investment in either property or fixed assets during the first seven months is sluggish, triggering market concerns over base metals demand. In addition, new RMB loans in July slumped to a near-five-year low, fueling market uncertainty toward China’s monetary policies.

However, the US and the UK have delivered more humanitarian aid to besieged Iraqi citizens while mediators hope to broker a peace deal over Gaza before a second 72-hour ceasefire between Israeli and Palestinian forces ends this evening restricted sharp fall in prices.

MCX base metals traded on a negative note in line with weakness in the international markets.


Copper

LME Copper prices plunged by 1 percent and fell to a seven-week low on Wednesday, dragged down by disappointing data on top consumer China's property sector, which raised concerns about the outlook for the metal used in power and construction. Also, the crisis in Ukraine has also sapped investor confidence by threatening a fragile economic recovery in Europe, thereby threatening demand from another major consumer.

In addition, weak economic data from the US and Euro Zone along with 0.5 percent gain in inventories acted as a negative factor. The red metal touched a low of $6873.75/tonne before closing at $6885/tonne.

MCX Copper prices slipped by 1.7 percent and touched a low of Rs.420.3/kg before closing at Rs.420.5/kg.


Outlook

We expect LME copper prices to trade lower today weak economic data fuelled concerns about the prospects for demand in China, the world's biggest consumer. Also, estimates of rise in unemployment claim data from the US and decline in German Prelim GDP will exert downside pressure on prices.

In the Indian markets, base metals will trade lower taking cues from international markets.

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