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Commodities Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (July 30, 2014)

July 30, 2014, Wednesday, 06:15 GMT | 01:15 EST | 10:45 IST | 13:15 SGT
Contributed by Angel Broking


Base Metals

Base metals on the LME traded lower yesterday as the market sentiments turned sour after the European Union and the United States announced further sanctions against Russia, targeting its energy, banking and defense sectors in the strongest international action yet over Moscow's support for rebels in eastern Ukraine. Also, cautious mode ahead of the FOMC meeting exerted downside pressure on prices.

Zinc which had been consistently performing well in the last few sessions also took a plunge amid speculation that a rally to the highest level since 2011was excessive.

In the Indian markets, all the base metals traded on a negative note taking cues from international trends.


Copper

LME Copper prices fell by 0.8 percent yesterday owing to surplus concerns as the world's top copper producer Freeport-McMoRan Inc clinched a deal with the Indonesian government to allow the miner to resume copper concentrate exports. Also, rise in risk aversion in the markets along with strength in the DX acted as negative factors.

However, decline in LME inventories by 1 percent coupled with positive consumer confidence data from the US restricted further fall. The red metal touched an intra-day low of $7065/tonne before closing at $7074.5/tonne in the last session.

MCX Copper prices declined by around 0.6 percent in line with international markets and closed at Rs.429.7/kg on Monday.


Outlook

We except LME Copper prices to trade lower today as investors remain cautious ahead of the outcome of the FOMC meeting due tonight. Also, concerns of increased supply after Newmont got a green signal from the Indonesian government will weigh down on prices.

However, estimates of positive GDP data from the US in the evening session will restrict sharp downside.

MCX Copper prices will trade on a negative note today taking cues from international markets.

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