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Commodities Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (July 17, 2014)

July 17, 2014, Thursday, 07:11 GMT | 02:11 EST | 10:41 IST | 13:11 SGT
Contributed by Angel Broking


Base Metals

Base metals (except aluminium) largely declined on Wednesday as jitters over a possible bond default in China's construction sector triggered a round of profit taking.

A Chinese builder has warned its investors it may not be able to repay a $65 million debt due next week, possibly becoming the first borrower to default in the country's largest bond market and highlighting concerns over the construction sector.

In the Indian markets, all the base metals traded largely on a negative note wherein most of the pack declined by more than 1 percent.


Copper

LME Copper prices traded declined by 1 percent on Wednesday as the bond default in China’s construction sector raises alarms on the demand side for copper.

Although, data from China indicated optimism as China’s Gross Domestic Product (GDP) and Industrial production grew, many doubt the recovery in China, the biggest consumer of base metals. In addition, decline in industrial production data from the US acted as a negative factor.

MCX Copper prices declined by 1.2 percent and touched an intra-day low of Rs.428.7/kg before closing at Rs.429.7/kg on Tuesday.


Outlook

We except LME Copper prices to trade sideways as concerns regarding the bond default in China’s construction sector along with estimates of unfavorable Philly Fed manufacturing data will exert downside pressure on prices. On the contrary, hopes of improved US housing data in the evening session will act as a positive factor for prices.

MCX Copper prices will trade sideways today taking cues from international markets.