Commodities

Industrial metals (copper, aluminium, nickel, etc.) daily review (February 11, 2013)

Contributed by Angel Broking

Base Metals

The base metals pack traded on bearish note in the last week after ECB President raised worries over the strength in the currency, Euro and also said that the economy might face downside risks despite reco very in the 2013. Strength in the DX also acted as a bearish factor for the base metal prices.

Subdued tra ding activity in Chinese market ahead of Lunar New Year festival in the next week also added to the losses in the base metals.

Depreciation in the Indian Rupee cushioned fall in the base metals pack on the MCX.

Copper

Copper prices fell 0.4 percent week on week. Political turmoil created after corruption allegations over Spain Prime Mariano Rajoy and uncertainty ahead of Italian elections led prices to witness selling pressure. Strength in the DX along with rise in the LME inventories added to the losses in the copper prices.

Optimism that the US Federal Reserve will continue with the bond buying program until jobs data improves in the nation cushioned fall in the LM E copper prices. Additionally, favorable import and CPI data from China erased some of the losses. But subdued activity ahead of th e Lunar Year festival restricted gains in the copper prices.

Co pper prices on LME touched a weekly low of $ 8,176.75 per tonne and closed at $8,276.5per tonne on Friday. In the domestic markets, MCX copper gained 0.5 percent and closed at Rs. 446.5 per kg on Friday. Depreciation in rupee supported an upside in the copper prices on MCX

Outlook

In today's session, we expect base metals to trade higher taking ces from positive data from the China in the last week along with weakness in the DX. However, Chinese market is closed for a week (February 11-16th 2013) on the occasion of Lunar New year celebrations which might restrict gains in the red metals. ECB President dovish comments in the last week that the downside risks to the euro region persist might also restrict the gains. Depreciation in the Indian Rupee will act as a supportive factor for the base metals prices on the MCX.