Commodities

Industrial metals (copper, aluminium, nickel, etc.) daily review (January 22, 2013)

Contributed by Angel Broking

Base Metals

Base metal prices traded on a negative note yesterday taking cues from weak physical demand from the top consumer of industrial metals, China. However, downside was restricted by the comments from the U.S. House Republican leaders that they would seek to pass a four month extension on debt ceiling issue.

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

Copper

Copper prices declined 0.4 percent on account of weak physical demand from China. Imports of refined copper by the nation dropped 4.7 percent in December 2012 as against the previous month. China consumes around 40 percent of the world's supplies of copper. Ri se in the copper inventories also pushed the prices of the metal downwards. However, the US lawmakers seeking an extension a four month extension for the resolution on the debt ceiling issue revived the risk appetite thus restricted the losses in the prices.

LME Copper inventories rose 0.04 percent in yesterday's session and stood at 345,525 tonnes on Monday as against 345,375 tonnes on 18th January 2013.

Prices of Copper on LME touched an intra-day low of $ 8,047 per tonne and cl osed at $ 8,055 /tonne on Monday. In the domestic markets, MCX copper declined 0.5 percent tracing weakness in the international prices. Depreciation in the Indian rupee however restricted losses in the metal prices. In the domestic markets prices of Copper on MCX touched an intra-day low of Rs. 436.1 per kg and closed at Rs. 436.3 per kg on Monday.

Outlook

In today's session, we except base metal prices to trade on a positive note on the back of approval of the disbursement of aid for Greece by the European finance ministers. The metal prices is also expected to get support from the hopes of recovery in the US and China. The US lawmakers seeking to vote on the bill to suspend the debt ceiling issue until May 19 would also lend support to the prices. Weakness in the DX is expected to push prices upwards. Announcement of stimulus package by the Bank of Japan is also e expected to push prices upwards. In the domestic markets, appreciation in the Indian rupee is expected to restrict gains of MCX base metal prices.