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Commodities Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (March 21, 2014)

March 21, 2014, Friday, 05:50 GMT | 02:50 EST | 11:20 IST | 13:50 SGT
Contributed by Angel Broking


Base Metals

Base metals on the LME traded on a negative note yesterday on the back of indications by the Federal Reserve that it would raise borrowing costs next year. Also, strength in the DX along with mixed market sentiments acted as negative factors.

Further, decline in LME inventories coupled with positive economic data from the US could not cushion sharp downside in the prices.

In the Indian markets, base metals traded lower despite Rupee depreciation.


Copper

LME Copper prices plunged around 2 percent yesterday taking cues from signals by the Fed to raise borrowing costs next year, thereby raising concerns of slow growth in the US. Additionally, strength in the DX coupled with rise in risk aversion in the markets in early part of the trade exerted downside pressure on prices.

Further, fall in inventories by 0.7 percent along with positive manufacturing data from the US failed to add an upside to the prices. The red metal touched an intra-day low of $6403/tonne before closing at $6452.5/tonne in yesterday’s trading session.

MCX Copper prices fell by 1.5 percent yesterday and closed at Rs.406.50/kg after touching an intra-day low of Rs.397.35/kg on Thursday.


Outlook

We expect base metals prices to trade on a mixed note today as upbeat market sentiments coupled with weakness in the DX will act as a positive factor for prices. Further, favorable economic data from the US in yesterday’s trade will support an upside in the prices

While on the other hand, speculation of higher interest rates by the US next year will continue to exert downside pressure on prices.

In the Indian markets, appreciation in the Rupee will keep a check on prices.