New York: 04:21 || London: 09:21 || Mumbai: 14:51 || Singapore: 17:21

Commodities » Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (March 24, 2014)

March 24, 2014, Monday, 05:32 GMT | 01:32 EST | 11:02 IST | 13:32 SGT
Contributed by Angel Broking


Base Metals

Base metals on the LME traded on a mixed note in the last week as strength in the DX along with mixed economic data from the US acted as negative factors. Further, another round of QE tapering coupled with indications of rise in interest rates exerted downside pressure on prices.

While on the other hand, decline in LME inventories coupled with positive manufacturing data from the US and favorable economic data from UK restricted sharp downside or reversal in the prices.

In the Indian markets, base metals traded lower owing Rupee appreciation.


Copper

LME Copper prices gained 0.1 percent last week on the back of easing of geopolitical tensions between Russia and Ukraine in the earlier part of week. Also, positive manufacturing and industrial data from the US supported gains in the red metal.

However, further QE tapering and signals by the Fed to raise borrowing costs next year, thereby raising concerns of slow growth in the US capped sharp gains. Additionally, strength in the DX coupled with rise in risk aversion in the markets exerted downside pressure on prices. Further, jump in inventories by 5.7 percent along with mixed economic data from EU and the US acted as negative factors. The red metal touched a weekly low of $6321/tonne before closing at $6480.25/tonne in the last trading session.

MCX Copper prices fell by 0.8 percent in the last week owing to Rupee appreciation and touched a weekly low of Rs.391.8/kg before closing at Rs.400.30/kg on Friday.


Outlook

We expect base metals prices to trade lower today on the back of decline in manufacturing activity from the biggest consumer, China. Also, expectations of weak manufacturing numbers from the US and Euro Zone will exert downside pressure on prices. However, upbeat market sentiments coupled with weakness in the DX will restrict sharp downside in prices. In the Indian markets, Rupee movement will provide direction to prices.