Commodities

Industrial metals (copper, aluminium, nickel, etc.) daily review (January 24, 2013)

Contributed by Angel Broking

Base metal prices traded on a firm note except copper on account of expectation of demand from the major consumers along with weakness in the DX in most part of the trade. Weak demand from the major consumer China due to lunar holidays capped sharp gains in the metals

In the Indian markets, appreciation in the rupee exerted downside pressure on the copper prices on MCX.

Copper

Copper prices declined 0.4 percent on account of weak physical demand from China along with expectation of well supplied market and rising output from the mining groups such as BHP Billiton. BHP BLT.L, the world's biggest mining group, released its quarterly report on Wednesday showing 5 percent higher copper output and forecasted that the world's biggest copper mine would step up production by a fifth this year. Apart from this, high domestic copper prod uction and rise in the copper LME inventories also exerted downside pressure on the copper prices. However, weakness in the DX in most part of yesterday's session cushioned fall in the copper prices.

LME Copper inventories rose 0.7 percent in yesterday's session and stood at 344,925 tonnes on Wednesday as against 342,450 tonnes on 23rd January 2013.

Prices of Copper on LME touched an intra-day low of $ 8,085 per tonne and closed at $ 8,103 /tonne on Wednesday. In the domestic markets, MCX copper declined 0.4 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. 437.7 per kg and closed at Rs. 438.55 per kg on Wednesday.

Outlook

In today's session we expect base metal prices to trade with upward bias due to positive data from the China. However, strength in the DX along with weak global market sentiments is expected to cap gains in the copper prices. In the domestic markets depreciation in the rupee might act as a supportive factor for the base metals prices on MCX.