Commodities

Industrial metals (copper, aluminium, nickel, etc.) daily review (January 30, 2013)

Contributed by Angel Broking

Base Metals

Base metal prices traded on a positive note in yesterday's session. The gain was on account of strong housing market data from the US. The optimism that the China, the largest users of base metals would grow 8.4 percent in the current year as per the Chinese Academy of Sciences as compared to 7.8 percent in the previous year. This would increase the demand for the base metals. Weakness in the DX also supported an upside in the prices. However, rise in the LME inventories put lid to the rise in the metal prices.

Copper

Copper prices gained 0.8 percent in yesterday's session. The gains in copper were seen on account of better data from housing market of the US and optimism that the demand for the metal would increa se from China as the economy is expected to grow at a robust pace. Weakness in the DX also supported an upside in the prices of base metals. However, rise in the LME inventories restricted gains in the metal prices.

LME Copper inventories increased 9 percent and stood at 371,750 during yesterday's session as compared to 342,900 tonnes on 28th January 2013. Copper prices on LME touched an intraday high of $8,122 per tonne and closed at $8,112.25 per tonne on Tuesday. In the domestic markets MCX copper fell 0.1 percent and closed at Rs. 438 per kg on Tuesday. Appreciation in the Indian rupee pressurised the copper prices on MCX.

Outlook

In the intra-day session, we expect copper prices to trade with upward bias due to optimism that Chinese economy would display a robust growth in this year. Also, the increase in the South Korea's industrial production might support the prices to move upwards. The industrial production of South Korea rose 1 percent in the month of December. Expectations that the FOMC would renew its commitment to asset purchases along with Weakness in the DX would also lent support to the base metal prices. In the domestic market, appreciation in the rupee is expected to exert downside pressure on base metals on MCX.