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Commodities Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (December 16, 2013)

December 16, 2013, Monday, 04:59 GMT | 23:59 EST | 09:29 IST | 11:59 SGT
Contributed by Angel Broking


Base Metals

Base metals on the LME traded on a positive note in the last week taking cues from positive economic data from the US that boosted demand outlook for the base metals. Also, decline in LME inventories of all base metals except Nickel couple with weakness in the DX supported gains. Also, upbeat global market sentiments in the earlier part of the week led to upside in the metals. Further, unfavorable economic data from China and Euro Zone along with weak global market sentiments on fears of early QE taper could not restrict gains in prices.

In the Indian markets, base metal prices gained owing to Rupee depreciation.


Copper

LME Copper traded higher by around 2 percent last week owing to positive retail sales data from the US. Also, decline in LME inventories by 3.7 percent to 393,000 tonnes along with weakness in the DX supported an upside in prices of the red metal. Further, weak market sentiments due to fears of early QE taper in the latter part of the week could not push the prices lower. Also, record Copper output in China in November owing to high treatment and refining fees led to concerns of oversupply, but could not prevent gains. The red metal touched a weekly high of $7265.25/tonne and closed at $7245.25/tonne on Friday.

MCX Copper jumped by 3.5 percent last week taking cues from Rupee depreciation and touched a high of Rs.462.4/kg before closing at Rs.461.75/kg on Friday.


Outlook

From the intra-day perspective, we expect base metals prices to trade on a negative note on the back weak market sentiments due to heightened concerns of QE tapering by the Federal Reserve. Further, decline in Chinese manufacturing data will exert downside pressure on the prices. However, weakness in the DX coupled with forecast for rise in manufacturing activity of Euro Zone and the US in the evening session will cushion sharp downside or even reversal in the prices.

In the Indian markets, Rupee depreciation will support an upside in the prices