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Commodities Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (January 20, 2014)

January 20, 2014, Monday, 06:02 GMT | 01:02 EST | 10:32 IST | 13:02 SGT
Contributed by Angel Broking


Base Metals
 
Base metals on the LME traded on a positive note last week taking cues from posi tive global growth forecast for 2014 by the World Bank that fuelled optimism regarding the demand outlook for the base metals. Also, p ositive manufacturing data from the US and industrial data from the Euro Zone coupled with favorable retail sales data from UK supported an upside in the base metals. However, overall mixed economic data from the US and Euro Zone coupled with strength in the DX acted as negative factor.
 
In the Indian markets, base metals traded higher despite Rupee appreciation.
 
 
Copper
 
LME Copper gained 0.1 percent in the last week as the World Bank raised the global growth outlook for 2014 to 3.2 percent from 2.4 percent in 2013, thereby brightening prospects for the red metal. Also, favorable manufacturing data from the US along with positive industrial production data from the Euro Zone acted as positive factors. Also, jump in retail sales data from the UK coupled with 1.5 percent weekly decline in inventories supported gains.
 
However, sharp gains were capped on the back of strength in the DX coupled with QE taper concerns over the week. The red metal touched a weekly high of $7370/tonne and closed at $7325.15/tonne on Friday.
 
MCX Copper traded higher by 0.3 percent touching a weekly high of Rs.460.75/kg and closed at Rs.458.65/kg on Friday. Rupee appreciation capped sharp gains in the red metal.
 
 
Outlook
 
We expect base metals to trade lower today on the back of unfavorable economic data from the biggest consumer, China. Further, concerns of further QE taper to be announced in the Jan 28th - 29th meeting will continue to exert downside pressure on prices. Also, weak market sentiments along with strength in the DX will act as negative factors. In the Indian markets, Rupee depreciation will cushion sharp fall or support an upside in the prices.