Base Metals
Base metals on the LME apart from Lead traded positive last week as mixed employment reports from the US have raised uncertainty regarding decision of the Federal Reserve regarding rate hike. Also, Chinese shares gained thereby propping up the risk appetite in the global markets.
On the MCX, all the base metal prices traded positive in line with international trends.
Copper
Last week, LME Copper prices jumped by 2.4 percent owing to easing of supply surplus concerns after major producers reported output cuts. The London-listed commodities trading and mining giant Glencore said it would suspend operations at two copper mines in Zambia and the Democratic Republic of Congo, withdrawing about 400,000 tonnes out of the market. Glencore’s supply cut is likely to substantially reduce the 545,000-metric-ton surplus.
Further, Freeport McMoRan will chop around 68,000 per tonnes both next year and in 2017 by suspending its Miami mine in Arizona and reducing output at both its Tyrone mine in New Mexico and its majority-owned El Abra mine in Chile.
MCX copper prices surged by 3.3 percent and closed at Rs.364.2/kg in line with international trends.
Outlook
We expect Copper prices to trade lower today as China’s fixed-asset investment rose at the slowest pace in 15 years and industrial production turned out lower than expected; thereby raising concerns whether steps taken by the Chinese government are suffice to support the flagging economy. Also, US September consumer sentiment weakened and producer prices remain unchanged and increased uncertainty over the Federal Reserve’s decision to hike rates.
On the MCX, copper prices are expected to trade sideways today as Rupee depreciation will cushion sharp fall.
Contributed by Angel Broking
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