Commodities

Industrial metals (copper, aluminium, nickel, etc.) daily review (January 03, 2013)

Contributed by Angel Broking

The base metals pack traded on a firm note in yesterday's session on the back of resolution of the US fiscal cliff issue as the cliff was averted by striking a deal among the lawmakers. The prices were also supported by the strong manufacturing data from China, the largest consumer of metals.

MCX base metals prices, tracing the international price movements also increased. Strong manufacturing activity measured by HSBC Manufacturing PMI rose to 54.7 in December as compared to 53.7 in November, also lent support to the metal prices. Appreciation in the Indian rupee, however, restricted the gains in metal prices. Copper

Copper prices increased 4.9 percent yesterday. The increase in the prices was due to the positive manufacturing data from the China and the resolution of the fiscal cliff issue. Weakness in the DX also supported an upside in the copper prices. However, rise in the LME inventories e xcreted downside pressure on the prices.

Copper inventories on LME increased by 0.1 percent in yesterday's session and stood at 320,500 tonnes on Tuesday as against 320,050 tonnes as on 31st December 2012.

Prices of Copper on LME touched a high of $ 8,255 per tonne and closed at $ 8,200/tonne on Wednesday. In the domestic markets, MCX copper gained 1.41 percent taking positive cues from the international markets. In the domestic markets, prices of Copper on MCX touched a high of Rs. 452.4 per kg and closed at Rs. 450.15 per kg on Wednesday.

Outlook

From the intraday perspective, the base metals are expected to gain on the back of the US fiscal cliff issue being resolved. Further, favorable manufacturing data from the China, UK and the US is also expected to support an upside in the base metals. However, strength in the DX might restrict gains. In the domestic markets, the metals might witness an upside on the account of strong manufacturing activity data. However, appreciation in the Indian rupee is expected to cap gains in the metal prices on MCX.