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Commodities Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (March 10, 2014)

March 10, 2014, Monday, 05:42 GMT | 01:42 EST | 10:12 IST | 12:42 SGT
Contributed by Angel Broking


Base Metals

Base metals on the LME traded on a mixed note in the last week on the back of unfavorable factory orders and unemployment rate data from the US. Also, decline in manufacturing data from China which increased concerns over the demand for the commodity acted as a negative factor.

While on the other hand, favorable industrial data from Euro Zone along with upbeat global market sentiments restricted sharp negative movement. Also, China maintained its growth forecast at 7.5 percent for 2014, added an upside to prices.

In the Indian markets, base metals traded on a mixed note but Rupee appreciation capped sharp gains.


Copper

LME Copper prices slumped by more than 3 percent last week taking cues from rise in unemployment rate in the US. Also, fall in manufacturing activity in the world’s biggest consumer, China coupled with more than forecasted decline in US factory orders data exerted downside pressure on prices. Additionally, unfavorable manufacturing data from Euro Zone acted as a negative factor.

Further, decline in jobless claims data from the second biggest consumer, the US, favorable factory orders data from the Germany along with upbeat global market sentiments could not provide respite to fall in the prices. Also, decline in LME inventories by 2.6 percent could not restrict downside movement. The red metal touched a weekly low of $6772/tonne before closing at $6786.34/tonne on Friday.

MCX Copper prices plunged by around 5 percent last week owing to Rupee appreciation and touched a weekly low of Rs.421.05/kg before closing at Rs.421.4/kg in the last trading session.


Outlook

We expect base metals prices to trade on a negative note today on the back of unfavorable trade balance and inflation data from Chinese economy increasing growth concerns for world’s second largest economy. Also, strength in the DX coupled with weak market sentiments will exert downside pressure on the prices. However, sharp downside in the prices will be cushioned due to forecast for favorable industrial production data from Germany and France. In the Indian markets, Rupee depreciation will cushion sharp downside in the prices.