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Commodities Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (February 04, 2014)

February 4, 2014, Tuesday, 05:21 GMT | 01:21 EST | 09:51 IST | 12:21 SGT
Contributed by Angel Broking

Base Metals
Base metals on the LME traded on a negative note yesterday taking cues from negative manufacturing data from the US, UK and China. Also, weak global market sentiments acted as negative factor. However, weakness in the DX coupled with decline in inventories restricted sharp negative movement in the prices.
In the Indian markets, base metals traded on a mixed note in the yesterday’s trading session.
LME Copper fell by 0.3 percent yesterday on the back of unfavorable manufacturing data from the two biggest consumers, the US and China, thereby leading to negative demand outlook for the red metal. Also, mixed economic data from Euro Zone along with weak global market sentiments exerted downside pressure on prices.
However, weakness in the DX cushioned sharp downside. Further, decline in LME Copper inventories by 0.2 percent restricted sharp downside movement in the prices. The red metal touched an intra-day low of $7020/tonne and closed at same levels in yesterday’s trade.
In the Indian markets, the metal declined by 0.3 percent thereby touching an intra-day low of Rs.442.8/kg and closed at Rs.443.7/kg on Monday.
We expect base metals prices to trade lower on the back of negative manufacturing data from the US and China in yesterday’s trade. Further, expectations of drop in factory orders from the US in the evening session and unfavorable construction data from the UK will exert downside pressure on the prices. Additionally, weak market sentiments along with strength in the DX will act as a negative factor.
In the Indian markets, Rupee depreciation will cushion sharp downside movement in the prices.