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Commodities Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (July 14, 2014)

July 14, 2014, Monday, 05:27 GMT | 00:27 EST | 08:57 IST | 11:27 SGT
Contributed by Angel Broking


Base Metals

Base metals on the LME traded on a positive note last week as the FOMC meeting minutes confirmed the winding up of QE program by October this year as US economy showed robust signs of recovery. Also, minutes indicated that the lower interest rates will remain so for longer, thereby giving a boost to base metals prices.

However, uncertainty regarding health of banks in the Euro region after Portugal’s biggest bank company’s default restricted sharp gains. In addition, unfavorable economic data from China and Euro Zone acted as negative factors.

In the Indian markets, base metals traded higher on account of Rupee depreciation.


Copper

LME Copper prices traded marginally higher by 0.1 percent last week owing to optimism regarding the US recovery after unemployment numbers fell to a 5-week low, thereby signaling towards positive demand outlook in the second biggest consumer.

However, unfavorable economic data from the biggest consumer, China along with rise in risk aversion in market sentiments following default by the parent company of Portugal’s biggest bank restricted sharp upside in prices. Further, gain of 1.3 percent in inventories along with negative industrial data from Euro Zone and UK acted as negative factors. The red metal touched a weekly high of $7170.75/tonne on Friday.

MCX Copper prices gained 0.3 percent taking cues from Rupee depreciation and touched a weekly high of Rs.437.8/kg in the last week.


Outlook

We except LME Copper prices to trade higher on the back of estimates of positive industrial production numbers from the Euro Zone for consecutive two months in a row, thereby supporting demand for the red metal. Also, weakness in the DX coupled with upbeat global market sentiments will support gains.

MCX Copper prices will take cues from trends in international markets.