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Commodities Industrial Metals

Industrial metals (copper, aluminium, nickel, etc.) daily review (September 05, 2014)

September 5, 2014, Friday, 06:11 GMT | 01:11 EST | 09:41 IST | 12:11 SGT
Contributed by Angel Broking


Base Metals

The base metals complex traded on a positive note yesterday driven by the prospect of positive employment data from the US. Also, European Central Bank cut interest rates, freeing up capital for industry and investors supported gains.

However, sharp upside in the prices was prevented due to strength in the DX.

In the Indian markets, base metals traded higher in line with international trends.


Copper

LME copper prices gained around 0.6 percent yesterday as U.S. companies hired workers at a steady clip in August and services sector activity accelerated to a 6-1/2-year high, assurances the economy was on track for sturdy growth in the third quarter. Further, monetary easing and rate cut by the ECB acted as a positive factor.

Sharp upside in the prices was limited by mounting supply, after Indonesian producers resumed shipments that had been halted since January over a tax and regulatory disagreement. The red metal touched an in tra-day low of $/tonne and closed at $6903/tonne in yesterday's trading session.

On the MCX, Copper prices rose by 0.6 percent as a result of strength in international trends.


Outlook

From the intra-day perspective, we estimate copper prices to trade higher on the back of estimates of favorable employment data from the US which will affirm robust recovery in the US economy and support demand. Further, expectations of favorable economic data from Euro Zone will support gains.

However, sharp upside in the prices will be prevented due to strength in the DX along with concerns of excess supply.

MCX copper prices are expected to trade on a positive note taking cues from strength in international markets.