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Commodities Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (June 12, 2014)

June 12, 2014, Thursday, 07:02 GMT | 02:02 EST | 10:32 IST | 13:02 SGT
Contributed by Angel Broking


Base Metals

Base metals on the LME traded on a negative note yesterday taking cues from weak global market sentiments. Also, mixed trend in LME inventories coupled with strength in the DX acted as negative factors.

Further, concerns regarding the demand outlook for 2014 after the World Bank cut 2014 global growth forecasts soared, thereby exerting downside pressure on the metals complex.

In the Indian markets, base metals traded lower in line with international markets.


Copper

LME Copper prices fell by 0.3 percent yesterday on the back of investors' concerns that China, the world's largest importer of the metal, would hold back from large scale measures to stimulate its economy in the face of slowing growth after statement of targeted measures by the Chinese premier. Further, Chinese probe into financing transactions eroded demand prospects for deals using the metal as collateral.

Also, rise in risk aversion in the market sentiments coupled with strength in the DX acted as negative factors. The red metal touched an intra-day low of $6654/tonne and closed at $6673.8/tonne on Wednesday.

MCX Copper prices declined 0.3 percent in line with international markets and touched an intra-day low of Rs.398.45/kg before closing at Rs.399.7/kg in the last trading session.


Outlook

We expect LME Copper prices to trade lower today as the probe into China’s warehousing deals will continue to hurt the demand for the red metal. Also, weak market sentiments along with strength in the DX will exert downside pressure on prices.

However, estimates of positive economic data from the US and Euro Zone will cushion sharp downside in prices.

In the Indian markets, Rupee movement will provide further direction to prices.