Commodities

Industrial metals (copper, aluminium, nickel, etc.) daily review (January 07, 2013)

Contributed by Angel Broking

Base metal prices traded on a firm note in the last week taking cues from positive manufacturing data from the US, UK and China in the last week. However, towards the end of the week worries that the US Federal Reserve might curtail the stimulus measures of $85 billion monthly bond buying program sometime in 2013 created bearish market sentiments. Additionally, strength in the DX along with worries over the US debt ceiling limit and negotiations over the spending cuts amongst the US lawmakers also erased some of the gains in base metals.

In the domestic markets depreciation in the rupee acted as a supportive factor for the upside in the base metals pack.

Copper

Copper prices gained 2.6 percent in the last week. Copper prices gained due to favourable data from the major consuming nation indicating the economies are on the path of recovery. However, US debt ceiling worries along with strength in the DX restricted sharp gains in the copper prices in the last week.

LME Copper inventories increased by 0.1 percent in last week and stood at 3,20,225 tonnes on Friday as against 3,20,050 tonnes on 28th December 2012.

Pri ces of Copper on LME touched a weekly high of $7,955.25 per tonne and closed at $ 8,102 /tonne on Friday. In the domestic markets MCX copper declined 2.7 percent tracing firmness in the international prices and depreciation in the Indian rupee. In the domestic markets prices of Copper on MCX touched a weekly high of Rs. 454.7 per kg and closed at Rs. 450.7 per kg on Friday.

Outlook

In the intra-day, base metal prices are expected to trade with upward bias due to mixed global market sentiments along with strength in the DX. Positive manufacturing data from the key consuming nations is indicating that the demand might witness an increase thereby supporting an upside in the copper prices. In the domestic markets prices might trade with an upward bias. However, appreciation in the rupee is expected to exert downside pressure on the MCX base metal prices.