Commodities

Industrial metals (copper, aluminium, nickel, etc.) daily review (September 03, 2012)

Contributed by Angel Broking

The base metals pack traded on negative note in the last week on the back of rise in risk aversion in the global markets tracking weak economic data from the Asian economies particularly Japan, China and South Korea. However, sharp downside in the prices was cushioned on account of decline in LME inventories apart from Nickel coupled with weakness in the DX.

In the Indian markets depreciation in the Rupee cushioned sharp fall in the prices.

Copper

Copper, the leader of the base metals complex declined by 0.9 percent during the week on the back of weak global market sentiments co upled with rise in Shanghai inventories.

However, sha rp fall in the prices was restricted taking cues from sharp decline in LME copper inventories by 2.4 percent which stood at 229,900 to nnes along with weakness in the DX. The red metal touched a low of $7,498/tonne during the week and closed at $7,592.0/tonne in the last trading session. On the domestic front, prices gained by 0.1 percent due to depreciation in the Indian rupee and closed at Rs.426.25/kg after touching a high of Rs.424.40/kg in the last week.

Weekly Copper Inventories

The red metal's inventories on the LME warehouses declined around 2.4 percent to 229,900 tonnes on 31st August 2012 from the previous level of 235,550 tonnes on 24th August 2012.

Weekly copper inventories at warehouses monitored by the Shanghai Futures Exchange increased by 0.5 percent to 158,065 tonnes last week.

Outlook

From the intra-day perspective, we expect base metal prices to trade sideways note on account of mixed global market sentiments along with weakness in the DX. While on the other hand, decline in China's manufacturing PMI will add downside pressure on the prices. In the Indian markets appreciation in the Rupee will lead to fall in the base metals prices on the MCX.