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Commodities Industrial Metals

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

June 30, 2014, Monday, 09:17 GMT | 04:17 EST | 12:47 IST | 15:17 SGT
Contributed by Angel Broking


Base Metals

Base metals on the LME traded on a positive note in the last week on the back of optimism regarding the economic scenario in the US and China. Further, positive manufacturing data from the major consumers supported gains.

However, sharp gains were capped owing to indication by a Federal Reserve official that the U.S. interest rates could rise by March. Also, mixed economic data from Euro Zone along with rise in risk aversion in the market sentiments exerted downside pressure on prices.

In the Indian markets, base metals traded higher last week in line with international markets.


Copper

LME Copper prices gained 1.7 percent last week taking cues from decline in inventories which fell by around 2.6 percent to the lowest levels since 2009. Also, favorable manufacturing data from the US and China added an upside to the prices.

However, Federal Reserve official signaled U.S. interest rates could rise by March capped sharp gains. China’s imports of refined copper fell 17 percent to 282,969 tons in May pointing towards falling demand of the red metal. Also, speculation of further drop as the Qingdao investigation may curb purchases from abroad by traders who use commodities as collateral to get loans gained traction. The red metal touched a weekly high of $6983.75/tonne and closed at $6933.8/tonne on Friday.

MCX Copper prices gained 0.6 percent and touched an intra-day high of Rs. 422.15/kg before closing at Rs.417.90/kg in the last trading session.


Outlook

We expect LME Copper prices to trade higher today on the back of estimates of favorable economic data from the US and Euro Zone. Also, weakness in the DX coupled with upbeat global market sentiments support gains.

In the Indian markets, base metals will trade higher in line with international markets.