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Commodities Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (May 12, 2014)

May 12, 2014, Monday, 05:37 GMT | 00:37 EST | 09:07 IST | 11:37 SGT
Contributed by Angel Broking


Base Metals

Base metals on the LME traded on a mixed note in the last week taking cues from statement by Janet Yellen that the US economy is on a recovery path except for the housing sector. Also, rise in risk appetite in the market sentiments along with decline in LME inventories supported gains. Further, positive manufacturing data from UK acted as a positive factor.

While on the other hand, mixed employment data from the US along with mixed economic data from Euro Zone exerted downside pressure. Also, ongoing tensions between Russia and Ukraine continued to act as a negative factor.

MCX base metals traded on a mixed note yesterday but Rupee appreciation restricted sharp upside.


Copper

LME Copper prices gained 0.4 percent yesterday taking cues from FOMC meeting statement that the US economy is improving thereby positing towards bright prospects for the red metal. Also, decline in LME inventories by a whopping 9.3 percent along with positive economic data from UK supported gains.

However, sharp gains were capped on the back of strength in the DX coupled with uneven recovery in US employment sector. Also, mixed economic data from Euro Zone exerted downside pressure on prices. The red metal closed at $6754.3/tonne after touching a weekly high of $6764/tonne on Friday.

MCX Copper prices rose by 0.5 percent last week despite Rupee appreciation and touched a weekly high of Rs.413.65/kg before closing at Rs.411.7/kg in the last trading session.


Outlook

We expect LME Copper prices to trade on a negative note today on the back of weak current account data from Japan that will exert downside pressure on prices.

Also, strength in the DX along with weak global market sentiments will act as a negative factor.

In the Indian markets, Rupee movement will provide further direction to prices.