Commodities

Industrial metals (copper, aluminium, nickel, etc.) daily review (February 20, 2013)

Contributed by Angel Broking

Base metals pack ended in the negative terrain in yesterday's session. The decline was on the back of fall in the confidence among the US home builders. The National Association of Home Builders/Wells Fargo builder confidence index fell to 46 levels in February as against 47 levels in January. Apart from this, the speculation that the Chinese government would take steps to cool property purchases also dampened the demand for the metal. Weakness in the DX however restricted losses in the metal prices.

Increase in the LME inventories also added to the losses in the base metals pack. MCX metal prices tracked the international prices.

Copper

Copper prices continued to extend losses of the previous day and fell 0.9 percent down on Tuesday. Weak National Association of Home Builders/Wells Fargo builder confidence index from the US and expectations that China would take steps to cool down the property pur chases weighed on the copper prices. Apart from this, strength in the DX also pushed copper prices downwards.

LME copper inventories gained 1.7 percent and stood at 411,250 tonnes as against 404,300 tonnes on February 15th, 2013.

Copper prices on LME touched an intra-day low of $ 8,038 per tonne and closed at $ 8,052 per tonne on Tuesday. In the domestic markets, MCX copper fell 1.1 percent and closed at Rs. 437.4per kg on Tuesday tracking the international metal prices.

Outlook

In today's session, we expect base metal prices to trade with upward bias taking cues from the favorable data from Germany indicating demand might improve from the third largest user of the industrial metals. Weakness in the DX is also likely to add to the gains in the base metal prices. Appreciation in the rupee is expected to cap gains in the MCX base metal prices.