New York: 01:34 || London: 06:34 || Mumbai: 10:04 || Singapore: 12:34

Commodities Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (June 23, 2014)

June 23, 2014, Monday, 06:04 GMT | 01:04 EST | 09:34 IST | 12:04 SGT
Contributed by Angel Broking


Base Metals

Base metals on the LME traded on a positive note last week on the back of revival of optimism in the economic scenario of the biggest consumers, the US and China. Further, speculation that efforts by Chinese policy makers to support growth in the world’s largest consumer of industrial metals will stabilize demand acted as a positive factor.

However, increasing instability in Iraq led to weak market sentiments and hurt the demand scenario. Also, mixed trend in LME inventories along with weak economic data from Euro Zone exerted downside pressure on prices.

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


Copper

LME Copper prices jumped by 2.7 percent last week as the Federal Reserve indicated towards recovery in the US economy. Also, China’s central bank extended a reserve-requirement cut to some national lenders in an effort to shore up an economy set for the weakest growth since 1990. Further, weakness in the DX along with 2.5 percent decline in inventories supported gains.

However, rise in risk aversion in the market sentiments after uncertain war situation in Iraq along with weak economic data from Euro Zone capped sharp gains. The red metal touched a weekly high of $6830/tonne and closed at $6820/tonne on Friday.

MCX Copper prices surged by 4 percent on account of Rupee depreciation and touched a weekly high of Rs.416.4/kg before closing at Rs.415.5/kg in the last trading session.


Outlook

We expect LME Copper prices to trade on a positive note today on the back of favorable manufacturing data from the biggest consumer, China that is expected to brighten demand prospects for the red metal. Also, weakness in the DX coupled with upbeat market sentiments will support gains in prices.

However, estimates of mixed economic data from the US and Euro Zone will cap sharp gains.

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