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Commodities Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (June 18, 2014)

June 18, 2014, Wednesday, 05:48 GMT | 00:48 EST | 09:18 IST | 11:48 SGT
Contributed by Angel Broking


Base Metals

Base metals on the LME traded on a positive note yesterday taking cues from speculation that efforts by Chinese policy makers to support growth in the world’s largest consumer of industrial metals will stabilize demand. Also, decline in inventories supported gains.

However, unfavorable economic data from the US, UK and Euro Zone capped sharp gains. Further, rise in risk aversion in the markets on the back of escalating tensions in Iraq coupled with strength in the DX acted as negative factors.

In the Indian markets, base metals traded higher owing to Rupee depreciation.


Copper

LME Copper prices gained 0.5 percent yesterday as China’s central bank extended a reserve-requirement cut to some national lenders including China Merchants Bank Co. and Industrial Bank Co., as well in an effort to shore up an economy set for the weakest growth since 1990. Also, decline of 0.7 percent in inventories to 161,200 tonnes added an upside to prices.

However, weak economic data from the significant consumers like the US, UK and Euro Zone restricted sharp upside in prices. The red metal touched an intra-day high of $6723/tonne and closed at $6719/tonne on Tuesday.

MCX Copper prices jumped by 0.7 percent taking cues from Rupee depreciation and touched an intra-day high of Rs.409.25/kg before closing at Rs.408.8/kg in the last trading session.


Outlook

We expect LME Copper prices to trade mixed today as the decision by the Federal Reserve over QE tapering will provide direction to prices. Also, weak market sentiments along with strength in the DX will act as a negative factor.

While on the other hand, efforts by Chinese government to spur growth will add an upside to prices.

In the Indian markets, Rupee depreciation will support gains in prices.