Commodities

Industrial metals (copper, aluminium, nickel, etc.) daily review (January 16, 2013)

Contributed by Angel Broking

Base metal prices traded on a negative note yesterday except for the Nickel which closed at a positive note. The decline in prices of base metals was due to the concerns over the US economy debt ceiling thus reducing the demand for the metals. Strength in the DX also supported the fall in the prices.

In the domestic markets, depreciation in the Indian rupee supported the base metals prices to move upwards.

Copper

Copper prices declined 0.2 percent in yesterday's session. The fall was attributed to the concerns over the US debt ceiling under which negotiations are required over the government's borrowing limit although the US Federal Reserve has indicated that the bank would continue the monetary easing programme.

Also, there are concerns over the growth prospects of China and the imports from the nation are also expected to decline on the account Lunar New Year in February. Rise in the LME copper inventories a lso pressurised the prices.

LME Copper inventories increased 1.1 percent in yesterday's session and stood at 333,275 tonnes on Tuesday as against 329,725 tonnes on 14th January 2013.

Prices of Copper on LME touched an intraday low of $ 7,940 per tonne and closed at $ 7,989 /tonne on Tuesday. In the domestic markets MCX copper increased 0.2 percent tracing depreciation in the Indian rupee. In the domestic markets prices of Copper on MCX touched an intraday high of Rs. 447.80 per kg and closed at Rs. 440.5 per kg on Tuesday.

Outlook

In today's session, we except metal prices to trade with upward bias owing to favorable retail sales from the US indicating that the economy is on the path of recovery. However, strength in the DX is expected to cap gains in the base metals prices. In the domestic markets, depreciation in the Indian rupee would push prices upwards on the MCX.