Commodities

Industrial metals (copper, aluminium, nickel, etc.) daily review (January 29, 2013)

Contributed by Angel Broking

Base Metals

Base metal prices traded on a positive note in yesterday's session expect for aluminium which declined. The gain was on account of signs of reco very in the world's largest consumer of metals China where the industrial companies profits rose in the month of December th us displaying growth momentum. Japan also raised its economic outlook for the year 2013-14 to 2.5 percent which supported the prices to move upwards. The US durable goods orders rose in the month of December thereby showcasing that there is rebound in the manufacturing sector. Decline in the LME inventories also lent support to the base metal prices. However, strength in the DX restricted the gains in the metal prices.

Copper

Copper prices gained 0.1 percent in yesterday's session. The advance of copper was due to the better data from China industrial companies and the Japanese government raising the outlook of the economy for the next fiscal year. Better durable goods orders data from the US along with decline in the copper inventories also supported the prices to move upwards. However, the US pending home sales declined in the month of December for the first time since August which put lid to the rising metal prices. Also, strength in the DX pressurized the metal prices.

LME Copper inventories decreased 0.57 percent and stood at 342, 900 during yesterday's session as compared to 344,850 tonnes on 25th January 2013. Copper prices on LME touched an intraday high of $8,086 per tonne and closed at $8,049 per tonne on Monday. In the domestic markets MCX copper fell 0.4 percent and closed at Rs. 438.4 per kg on Monday. Strength in the international copper prices coupled with depreciation in the Indian rupee lent support to the MCX copper prices to move upwards.

Outlook

In the intra-day session, we expect copper prices to trade with upward bias due to positive data from the China and the US along with hopes of recovery in Japan which might support the metal prices. 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.