Commodities

Industrial metals (copper, aluminium, nickel, etc.) daily review (October 01, 2012)

Contributed by Angel Broking

Entire base metals pack ended the week on a bearish note on the back of weak global market sentiments triggered by renewed worries of the Euro zone. Additionally, mixed LME inventories also added downsi de pressure on the prices.

However, anticipation of stimulus measures by the China after observing weak economic data there, cushioned sharp fall in the base metal prices in the last week.

In the Indian markets, appreciation in the Indian Rupee added further downside pressure on the prices.

Copper

Copper, the leader of the base metals complex declined by 0.9 percent week on week on the back of renewed debt concerns of the Euro zone which indicated that global markets too might slow down. Strength in the DX also added to the losses of the red metal. However, marginal decline in the LME Copper inventories by 0.03 percent which stood at 219,400 tonnes cushioned sharp fall in the prices.

The red metal touched a weekly low of $8,082/tonne and closed at $8,218.0/tonne in last week. On the domestic front, prices fell by 1.3 percent on account of appreciation in the Indian Rupee and closed at Rs.440.6/kg on Friday after touching a weekly low of Rs.436.80/kg in the last week.

Weekly Copper Inventories

The red metal's inventories on the LME warehouses declined marginally around 0.03 percent to 219,400 tonnes on 28th September 2012 from the previous level of 219,475 tonnes on 21st September 2012.

Weekly copper inventories at warehouses monitored by the Shanghai Futures Exchange declined by 2.6 percent to 162,547 tonnes last week.

Outlook

In the intra-day, we expect base metals to trade on a bearish note on the back of weak global market sentiments coupled with strength in the DX. Chinese market will remain close on the occasion of mid autumn and Chinese National Day Holidays from September 29 to October 7, 2012. This is expected to cap sharp volatility in the prices. In the Indian markets depreciation in the Indian rupee might however, cushion sharp fall in the base metal prices on MCX.