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Commodities Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (December 05, 2013)

December 5, 2013, Thursday, 11:09 GMT | 06:09 EST | 15:39 IST | 18:09 SGT
Contributed by Angel Broking


Base Metals

Base metals on the LME traded on a positive note on the back of favorable new home sales data from the US. Also, expectations that the demand will be boosted in the world’s second largest consumer taking cues from favorable economic data from the US, supported gains.

Further, mixed inventories data coupled with fears of early QE taper could not pull the prices down.

In the Indian markets, base metals traded on a positive note but Rupee appreciation capped sharp gains.


Copper

LME Copper jumped by 2 percent yesterday taking cues from positive new home sales data. Also, decline in inventories by 0.8 percent to 415,425 tonnes supported gains in the red metal.

Further, fears of early QE taper on the back of positive economic data from the US coupled with weak global market sentiments could not restrict upside in prices of the metal. The red metal touched an intra-day high of $7128/tonne and closed at $7094/tonne on Wednesday.

MCX Copper prices traded higher by 1.3 percent yesterday despite Rupee appreciation touching an intra-day high of Rs.451.8/kg and closed at Rs.451.3/kg.


Outlook

From the intra-day perspective, we expect base metals prices to trade on a mixed note on the back of expectations of favorable GDP data from the US that is likely to boost demand for base metals. Further, upbeat new sales data from the US in yesterday’s trade will support an upside in the prices. However, weak market sentiments coupled with strength in the DX will cap sharp upside or even reversal in the prices. Additionally, concerns regarding the QE tapering by the Federal Reserve will act as a negative factor.

In the Indian markets, Rupee appreciation will restrict sharp gain in the prices.