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Commodities Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (December 04, 2013)

December 4, 2013, Wednesday, 16:23 GMT | 11:23 EST | 20:53 IST | 23:23 SGT
Contributed by Angel Broking


Base Metals

Base metals on the LME traded on a negative note on the back of heightened concerns of QE taper after expectations of favorable economic data from the US economy during the week.

Also, mixed inventories data exerted downside pressure on prices. However, weakness in the DX coupled with positive construction data from UK cushioned sharp fall.

In the Indian markets, base metals traded on a mixed note and sharp downside was prevented due to Rupee depreciation.


Copper

LME Copper declined by 0.3 percent yesterday taking cues from fears of early QE taper on the back of positive economic data from the US. However, decline in inventories by 0.4 percent to 418,750 tonnes coupled with weakness in the DX restricted sharp fall in prices of the red metal. LME Copper touched an intra-day low of $6938/tonne and closed at $6955/tonne on Tuesday.

MCX Copper prices traded on a flat note yesterday and sharp downside was restricted due to Rupee depreciation.


Outlook

From the intra-day perspective, we expect base metals prices to trade on a negative note on the back of weak market sentiments coupled with strength in the DX. Additionally, concerns regarding the QE tapering by the Federal Reserve will act as a negative factor. Further, expectations of decline in ISM non-manufacturing data from the US in the evening trade will exert downside pressure on the prices. However, expectations of positive new home sales data from the US will cap sharp downside in base metals.

In the Indian markets, Rupee depreciation will restrict sharp fall in the prices.