Commodities » Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (March 04, 2013)

Contributed by Angel Broking

The base metals pack traded on a negative note due to slow growth of US GDP data for Q4 of 2012, decline in China's manufacturing data along with increase in LME inventories. Additionally, strength in DX coupled with worries over global economic growth after unfavourable economic data from Euro region also added downside pressure on the prices.

However, sharp downside in the prices was cushioned on account of favourable economic data from US, positive statements from US Fed Chairman Ben Bernanke and European Central Bank (ECB) President Mario Draghi. In the Indian markets, sharp decline in the base metal prices was prevented due to depreciation in rupee.


Copper

Copper, the leader of the base metal pack declined by 1.2 percent in the last week on the back of weak US GDP data, fall in China's manufacturing data, strength in DX and increase in LME inventories by 8.1 percent which stood at 458,775 tonnes.

Positive US Initial Jobless Claims data coupled with rise in US manufacturing PMI prevented sharp declines. The red metal touched a weekly low of $7,652/tonne and closed at $7,720.50/to nne in the last trading session of the week.

On the domestic front, prices gained by 1.6 percent on the back of depreciation in the Indian Rupee and closed at Rs. 430.45/kg on Friday after touching a low of Rs. 417.8 /kg in the last week.

Copper Inventories

LME copper inventories gained 8.1 percent in the last week and stood at 458,775 tonnes as on 1st March, 2013 as against 424,350 tonnes as on 22nd February, 2013.

Copper inventories in the warehouse monitored by the Shanghai rose by 8.9 percent and stood at 226,201 tonnes for the week ending on 1st March, 2013.


Outlook

In the intra-day, we expect base metals prices to trade on the positive side on the back of expectations of stimulus measures from Bank of Japan. Further, expectation of positive Spanish Unemployment change data and UK construction PMI will also support prices. Whereas, Weak global market sentiments along with strength in the DX may cap the sharp rally in prices. Depreciation in the Indian Rupee will support the prices to trade positive on MCX.