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Commodities Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (February 25, 2014)

February 25, 2014, Tuesday, 07:03 GMT | 02:03 EST | 11:33 IST | 14:03 SGT
Contributed by Angel Broking


Base Metals

Base metals on the LME traded on a mixed note yesterday taking cues from rise in risk aversion in the earlier part of trade along with mixed economic data from Euro Zone.

While in the latter part, market sentiments turned upbeat and supported gains in the base metals. Also, decline in inventories along with weakness in the DX acted as a positive factor.

In the Indian markets, base metals traded lower owing to Rupee appreciation.


Copper

LME Copper prices fell by 0.7 percent yesterday on the back of news reported by Shanghai Securities that some banks in China are curbing real-estate loans, pointing towards sluggish demand growth from the world’s largest metal-consuming country. Also, mixed economic data from Euro Zone exerted downside pressure on prices of the metal.

However, further losses were cushioned on the back of weakness in the DX along with decline in inventories by 1 percent to 282,475 tonnes. The red metal touched an intra-day low of $7033/tonne and closed at $7099.75/tonne on Monday.

MCX Copper prices fell by 0.3 percent yesterday owing to Rupee appreciation and touched an intra-day low of Rs.442.4/kg before closing at Rs.446.4/kg on Monday.


Outlook

We expect base metals prices to trade on a positive note today taking cues from upbeat market sentiments coupled with weakness in the DX. Further, expectations of favorable economic data from Euro Zone and the UK will support an upside in the prices. Additionally, any major announcement by the European Union Economic Forecast report will provide direction to the prices. However, estimates of decline in consumer confidence data from the US in the evening session will cap sharp upside or even reversal in the prices.

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