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Commodities Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (January 13, 2014)

January 13, 2014, Monday, 05:25 GMT | 00:25 EST | 10:55 IST | 13:25 SGT
Contributed by Angel Broking


Base metals on the LME traded on a mixed note last week taking cues from unfavorable inflation data from China. Also, favorable economic data from the US in early part of the trade strengthened the case for further QE tapering, thereby curbing demand for the base metals. Also, mixed global market sentiments acted as negative factor.
 
Further, favorable economic data from the Euro Zone coupled with weakness in the DX acted as positive factors. Decline in LME inventories along with weak non-farm employment data easing QE tapering concerns was supportive for the prices.
 
In the Indian markets, base metals traded lower in the last week owing to Rupee appreciation.
 
 
Copper
 
LME Copper traded on a flat note in the last week swinging between gains and losses on the back of positive economic data from the Euro Zone and negative data from China. Also, mixed economic data from the US could not provide direction to prices.
 
Further, decline in LME and Shanghai copper inventories could not push the prices higher and concerns of further QE taper in the early part of the trade on the other hand could not push them lower. The metal touched a weekly low of $7209/tonne and closed at $7313.75/tonne in the last trading session of the week.
 
MCX Copper traded on a negative note by 1.7 percent taking cues from Rupee appreciation and touching a weekly low of Rs.453.6/kg and closed at Rs.457.45/kg on Friday.
 
 
Outlook
 
Base metals on the LME will trade higher on the back of ease in concerns of the QE tapering by the Federal Reserve after decline in the US non-farm employment data on Friday. Further, upbeat market sentiments coupled with weakness in the DX will support an upside in the prices. Further, jump in Copper imports by China in the month of December along with consistent decline in LME Copper inventories will act as a supportive factor for the red metal. Ban by Indonesia on nickel ore exports will support nickel prices. However, unfavorable inflation data from the biggest consumer, China will cap sharp gains in the prices. In the Indian markets, Rupee appreciation will restrict sharp upside in prices of the base metals.