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Commodities Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (December 23, 2013)

December 23, 2013, Monday, 05:23 GMT | 00:23 EST | 09:53 IST | 12:23 SGT
Contributed by Angel Broking


Base Metals

Base metals on the LME traded on a mixed note last week taking cues from QE taper of $10 billion by the Federal Reserve. Additionally, decline in manufacturing data from China, the biggest base metals consumer along with strength in the DX led to decline in the base metals. However, favorable economic data from the advanced economies US, UK and Euro Zone in the earlier part of the week restricted sharp negative movement.

In the Indian markets, base metals traded on a mixed note but Rupee appreciation acted as a negative factor.


Copper

LME Copper declined by 0.1 percent last week on the back of commencement of QE taper of $10 billion by the Fed coupled with weak manufacturing data from China. Also, strength in the DX acted as negative factor.

However, favorable economic data from the US, UK and Euro Zone coupled with a whopping decline in inventories by 6.3 percent to 382,550 tonne s cushioned sharp downside. The red metal touched a weekly low of $7176/tonne and closed at $7235.8/tonne on Friday.

MCX Copper prices fell by 0.7 percent due to Rupee appreciation touching a weekly low of Rs.457.2/kg and closed at Rs.458.7/kg on Friday.


Outlook

We expect base metals to trade on a positive note on the back of forecast for positive consumer sentiment data from the US in the evening session. Also, favorable GDP data from the US on Friday will continue to act as a positive factor for prices in today's trade. Further, weakness in the DX coupled with upbeat global market sentiments will support an upside in the prices. Also, the IMF said it will be positive on outlook for the US for 2014, thereby boosting demand for the base metals, which will lead to gains in the red metal.

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