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Commodities Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (February 24, 2014)

February 24, 2014, Monday, 06:43 GMT | 01:43 EST | 11:13 IST | 13:43 SGT
Contributed by Angel Broking


Base Metals

Base metals on the LME traded on a positive note last week on the back of rise in risk appetite in the markets in the earlier part of week. Also, favorable manufacturing data from the US acted as a positive factor. Further, decline in inventories supported gains in the base metal space.

However, strength in the DX coupled with weak manufacturing data from China and Euro Zone capped sharp gains.

In the Indian markets, base metals traded higher owing to Rupee depreciation.


Copper

LME Copper traded on a flat note last week as the upbeat market sentiments in the earlier part of trade along with positive manufacturing data from the US pushed the prices higher. Also, decline in inventories by a whopping 4.6 percent supported gains.

But, gains were wiped out on the back of unfavorable manufacturing data from the biggest consumer, China and Euro Zone. Also, strength in the DX acted as a negative factor.

MCX Copper prices jumped by 1 percent in the last week taking cues from Rupee depreciation, and touched a weekly high of $7220/tonne before closing at $7150/tonne on Friday.


Outlook

We expect base metals prices to trade on a negative note today taking cues from unfavorable existing home sales data from the US in the last week. Additionally, weak market sentiments coupled with strength in the DX will exert downside pressure on the prices. Further, Chinese banks curbing the lending to property sector and industries like steel and cement due to expectations of correction in the property prices will act as a negative factor.

However, expectations of favorable business climate data from the Germany will cushion sharp downside in the prices.

In the Indian markets, Rupee depreciation will restrict sharp negative movement or even reversal in the prices.