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Commodities Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (May 13, 2014)

May 13, 2014, Tuesday, 05:29 GMT | 00:29 EST | 09:59 IST | 12:29 SGT
Contributed by Angel Broking


Base Metals

Base metals on the LME traded on a positive note yesterday as the biggest consumer China is showing signs that the government will take steps to strengthen financial markets. Also, rise in risk appetite in the market sentiments supported gains.

However, ongoing tensions between Russia and Ukraine continued to exert downside pressure in prices. Further, mixed trend in LME inventories acted as a negative factor.

MCX base metals traded higher yesterday but Rupee appreciation restricted sharp upside.


Copper

LME Copper prices jumped by 1.8 percent yesterday on the back of statement posted on the Chinese central government’s website which said that it will develop commodities-trading tools, relax limits on some foreign investment and expand quotas for capital flow thereby pointing towards bright prospects for the red metal. Also, decline in LME inventories by 1.4 percent along with upbeat global market sentiments supported gains.

Further, concerns of civil war between Russia and Ukraine could not prevent sharp upside in prices. The red metal closed at $6879/tonne after touching an intra-day high of $/tonne on Monday.

MCX Copper prices surged by 1.5 percent and touched an intra-day high of Rs.420.1/kg before closing at Rs.417.8/kg in the last trading session.


Outlook

We expect LME Copper prices to trade on a mixed note today on the back of estimates of positive Industrial Production data from China that will support gains. Also, weakness in the DX coupled with upbeat market sentiments will act as a positive factor.

While on the other hand, expectations of mixed economic data from the US and Euro Zone will act as a negative factor.

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

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