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Commodities Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (March 31, 2014)

March 31, 2014, Monday, 05:58 GMT | 00:58 EST | 09:28 IST | 11:58 SGT
Contributed by Angel Broking


Base Metals

Base metals on the LME traded on a mixed note in the last week taking cues from mixed economic data from the US along with weak manufacturing data from China which exerted downside pressure on prices. Also, mixed manufacturing data from the Euro Zone coupled with strength in the DX and mixed inventories data acted as negative factors.

While on the other hand, expectations of demand pick up in China owing to lower prices and rising orders supported gains. Further, rise in risk appetite in the market sentiments in the latter part added an upside to prices.

In the Indian markets, base metals traded on a mixed note but Rupee appreciation restricted sharp positive movement in prices.


Copper

LME Copper prices jumped by around 3 percent last week on the back of expectations that demand will fasten in the world’s biggest consumer, China given lower prices and increasing order book. Also, concerns that global supply will be lesser than forecasted on the back of shutdown in copper mines in the biggest producer, Chile along with rise in risk appetite in the market sentiments supported gains.


Further, weak manufacturing data from the US, China and Euro Zone coupled with strength in the DX could not restrict sharp gains. Additionally, gain of 0.6 percent in inventories could not push the prices lower. The red metal touched a weekly high of $6673.5/tonne and closed at $6660/tonne on Friday.

MCX Copper prices surged by around 1 percent in the prior week and closed at Rs.404.6/kg after touching a weekly high of Rs.405.45/kg. Rupee appreciations capped sharp gains in prices.


Outlook

We expect LME copper prices to trade on a mixed note today as weak industrial production data from Japan along with strength in the DX will exert downside pressure on prices. Also, estimates of unfavorable German retail sales data will act as a negative factor.

While on the other hand, estimates of positive Chicago PMI data from the US in the evening session coupled with upbeat market sentiments will cushion sharp downside or even reversal in prices.