Commodities

Industrial metals (copper, aluminium, nickel, etc.) daily review (January 21, 2013)

Contributed by Angel Broking

Base metals traded on a positive note during the previous week on the back of rise in GDP of China. Base metals also took strength from the positive housing data from the US. However, strength in the DX coupled with rise in the inventories of metals except for lead restricted gains in the prices.

In the domestic markets, prices remained under pressure due to appreciation in the rupee.

Copper

Copper prices gained 0.6 percent week on week tracking favourable GDP data from China indicating that demand for the metal might increase as the economy progresses. Favourable housing sector data from the US also acted as a supportive factor for the red metal prices last week. However, strength in the DX along with global growth worries capped gains in the copper prices in the last week. US debt ceiling worries also weighed on the copper prices in yesterday's session. Rise in the copper inventories by 4.7 percent also restricted gains in the copper prices.

LME Copper inventories increased 4.7 percent in the last week and stood at 345,375 tonnes on Friday as against 329,725 tonnes on 11th January 2013.

Prices of Copper on LME touched a weekly high of $ 8,162 per tonne and closed at $ 8,088/tonne on Friday. In the domestic markets MCX copper declined 1.6 percent due to appreciation in the Indian rupee. In the domestic markets prices of Copper on MCX touched a weekly low of Rs. 435.3 per kg and closed at Rs 438.4 per kg on Friday.

Outlook

In the intra-day we expect base metal prices to trade with a positive bias on the back of mixed global market sentiments along with weakness in the DX. Favorable Chinese GDP data is raising hopes that the demand for the industrial metals might witness a rise thereby supporting an upside in the pack. In the domestic market, appreciation in the rupee is expected to cap gains of the metal prices on MCX.