Commodities

Industrial metals (copper, aluminium, nickel, etc.) daily review (January 28, 2013)

Contributed by Angel Broking

Base Metals

Base metal p rices traded on a mixed note with prices of copper and nickel trading in the negative zone while lead, zinc and aluminium witnessing gains in the last week. Favourable data from the China and Euro regions raised hopes of increase in the demand for the base metals. Weakness in the DX also acted as a supportive factor for the firmness in the base metals. However, sharp gains were capped as the IMF downward revised the global growth forecast for 2013 to 3.5 percent.

Copper

Copper prices declined 0.6 percent in the last week. Dull appetite by the Chine se buyers due to the ongoing Lunar New Year period along with rise in the output at Chile's Escondida, the largest copper mine jumped 31 percent in the fourth quarter of 2012 weighed on the prices. However, favourable data from the major consuming nation, weakness in the DX, decline in the LME inventories week on week cushioned fall in the copper prices.

LME Copper inventories decreased 0.8 percent during last week and stood at 342,900 tonnes on Friday as against 345,525 tonnes on 18th January 2013. Copper inventories at warehouse monitored by the Shanghai Futures Exchange declined by 1.7 percent to 2,05,120 tn in the w/e 25th January, 2013.

Copper prices on LME touched a weekly low of $8,010 per tonne and closed at $8,042 per tonne on Friday. In the domestic markets, MCX copper fell 0.14 percent and closed at Rs. 436.6 per kg on Friday. Weakness in the international copper prices along with appreciation in the rupee led prices to remain in the negative territory in the last week

Outlook

In the intra-day we expect copper prices to trade with upward bias due to favorable data from the China along with hopes of recovery in the major nations which might increase the demand for the metal. Weakness in the DX is also expected to support an upside in the copper prices. In the domestic market, appreciation in the rupee is expected to exert downside pressure on base metals on MCX.