Commodities

Industrial metals (copper, aluminium, nickel, etc.) daily review (January 23, 2013)

Contributed by Angel Broking

Base Metals

Base metal prices traded on a positive note yesterday taking cues from the developments in Greece and Japan. The Euro area finance ministers ap proved the next disbursement aid to Greece of 9.2 billion Euros ($12.3 billion). Bank of Japan adopted open ended asset purcha ses programme of about 13 trillion yen ($145 billion) assets per month from January 2014 which would increase the appetite for metals. Decline in the inventories also supported an upside in the metal prices. Weak DX also lent support to the prices. In the dome stic markets, marginal appreciation in the Indian rupee estricted gains in the base metals prices.

Copper

Copper prices in yesterday's trade rose 1 percent on the back of stimulus measures by the Euro area finance ministers and Bank of Japan. Apart from this, the German ZEW indicator, a measure of economic sentiments of the nation, increased substantially. Decline in the LME inventories and a weak DX supported an upside in the metal prices. However, the US existing home sales expectedly dropped which put lid to the rise in the metal prices.

LME Copper inventories declined 0.9 percent in yesterday's session and stood at 342,450 tonnes on Tuesday as against 345,525 tonnes on 21st January 2013.

Prices of Copper on LME touched an intra-day high of $ 8,144.5per tonne and closed at $ 8138.5/tonne on Tuesday. In the domestic markets, MCX copper declined 0.9 percent tracing firmness in the international prices. Appreciation in the Indian rupee however, restricted sharp gains in the copper prices. In the domestic markets prices of Copper on MCX touched an intra-day high of Rs. 440.5 per kg and closed at Rs. 440.2 per kg on Tuesday.

Outlook

In today's session, we except base metal prices to trade upwards on the back of favorable economic data from the Euro region and the measures by the finance ministers of the region. However, the decline in the copper prices can be witnessed on the account of record production of refined metal in China. Refined copper production of the nation surged 22 percent in December at 580,000 tons, according to National Bureau of Statistics. About 40 percent of the world's supplies of copper are consumed by China. The concerns over the US debt ceiling still lingers thus dampening the metal prices. The strong DX might also push the metal prices downwards. In the domestic markets, depreciation in the Indian rupee is expected to lend support to the metal prices of MCX.