New York: 19:28 || London: 00:28 || Mumbai: 03:58 || Singapore: 06:28

Commodities Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (December 09, 2013)

December 9, 2013, Monday, 04:29 GMT | 23:29 EST | 08:59 IST | 11:29 SGT
Contributed by Angel Broking


Base Metals

Base metals traded on a positive note in the last week taking cues from favorable economic data from the US. Also, upbeat manufacturing data from China coupled with decline in LME inventories except Nickel supported gains in base metals.

However, sharp gains were capped on the back of weak global market sentiments due to rising concerns of the QE taper.

In the Indian markets, base metals traded on a mixed note but Rupee appreciation restricted sharp positive movement.


Copper

While the week began on a negative note for copper prices, over the week it was seen that prices recovered on the back of upbeat US economic data. Also supply squeeze of the metal along with rise in Chinese imports on stockpiling ahead of winter and supply disruption after a week long holiday in October supported gains.

Generally, positive data from the US raises fears of a QE taper; the reaction that we saw in the base metals space was the opposite as an improving US economy leads to optimism over demand for base metals.

Prices on the LME were trading below the crucial $7000/tonne mark on the LME but the red metal recovered mid-week and closed the week at $7111/tonne, rising around 1.2 percent.

On the MCX, prices witnessed a gain of around 0.4 percent as Rupee appreciation capped sharp upside in the prices.


Outlook

From the intra-day perspective, we expect base metals prices to trade on a positive note on the back of more than expected rise in Chinese exports. Also, forecast for favorable industrial production data from Germany along with upbeat economic data from the US in the last week will support an upside in the prices. Additionally, upbeat market sentiments coupled with weakness in the DX will act as a positive factor.

Specifically for Copper, near term supply tightening will add an upside to the prices.

In the Indian markets, Rupee appreciation will cap sharp gains in the prices.