Commodities

Industrial metals (copper, aluminium, nickel, etc.) daily review (February 18, 2013)

Contributed by Angel Broking

Base metal prices traded on a mixed note during the week. The rise in the metal prices was on the back of increase in the US consumer confidence which rose to 76.3 levels in February. Decline in the LME inventories except for copper supported the metal prices to move upwards. However, decline in the US industrial production to 0.1 percent in January from a rise of 0.4 percent in December restricted gains in the metal prices. Euro zone GDP also contracted in the fourth quarter. Strength in the DX also restricted gains. Subdued trading activity on the account of weeklong Lunar New Year holidays in China also kept prices in check.

Depreciation in the Indian Rupee supported the MCX metal prices to trade upwards except for zinc mirroring the international prices

Copper

Copper prices swayed between gains and losses and ended 0.43 percent down taking cues from contraction in the growth in Europe, one of the key consuming nations of red metal along with subdued trading activity in China, the major consumer of the industrial metal. Rise in the LME inventories along with strength in the DX also l ead to the fall in the copper prices. Decline in the US industrial output also weighed on the prices. However, favourable consumer se ntiment in US along with hopes of rise in the demand from China after Lunar New Year holidays cushioned fall in the prices.

LME copper inventories gained 0.5 percent week on week and stood at 401,675 tonnes as against 399,775 tonnes on February 08, 2013. Copper prices on LME touched a weekly low of $ 8,166.25 per tonne and closed at $ 8,240.75 per tonne on Friday. In the domestic markets, MCX copper gained 0.4 percent and closed at Rs. 448.35 per kg on Friday. Depreciation in rupee supported an upside in the copper prices on MCX.

Outlook

In the intra-day we expect base metal prices to trade with bearish tone owing to global growth worries as US industrial production declined along with more than expected contraction in the Euro zone economy. However, as Chinese markets reopen today downside in the prices are likely to be capped on hopes of revival in demand. In the domestic market, depreciation in the rupee is expected to cushion fall in the prices of the base metals on MCX.