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Commodities » Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (February 20, 2014)

February 20, 2014, Thursday, 05:48 GMT | 00:48 EST | 11:18 IST | 13:48 SGT
Contributed by Angel Broking


Base Metals

Base metals o n the LME traded on a mixed note yesterday taking cues from weak global market sentiments in the latter part of trade along with strength in the DX. Also, negative economic data from the US acted as a negative factor.

While on the other hand, decline in LME inventories supported gains in the base metal space. Also, FOMC meeting minutes indicated that lower interest rates will be maintained even after unemployment rate of 6.5 percent is reached, thereby acting as a positive factor for base metals.

In the Indian markets, base metals traded on a mixed note in the yesterday's tra ding session.


Copper

LME Copper prices fell by 0.2 percent yesterday on the back of unfavorable economic data from the US. Also, rise in risk aversion in the markets along with strength in the DX exerted downside pressure on prices.

However, sticking to lower interest rates as indicated by the FOMC meeting minutes even after unemployment threshold is reached prevented further fall in the prices. Also, decline in LME copper inventories by 0.9 percent to 290,625 tonnes restricted sharp negative movement in the metal. The red metal touched an intra-day low of $7168.5/tonne and closed at $7174/tonne on Wednesday.

In the Indian markets, copper prices traded on a flat note and closed at Rs.451.4/kg after touching an intra-day high of Rs.453.2/kg on Wednesday.


Outlook

We expect base metals prices to trade on a negative note today taking cues from unfavorable manufacturing data from the biggest consumer, China. Also, expectations of unfavorable economic data from Euro Zone and the US in the evening session will act as a negative factor. Further, strength in the DX along with weak market sentiments will exert downside pressure on prices. Additionally, unfavorable economic data from the US in yesterday's trade will continue with downside pressure on the prices. In the Indian markets, Rupee depreciation will restrict sharp downside in prices.