• Industrial metals (copper, aluminium, nickel, etc.) daily review (September 24, 2015)

    Base Metals

    Base metals on the LME traded mixed yesterday as Chinese flash estimate of its Purchasing Managersí Index fell to 47.0 in September from 47.3 in August. Thatís the lowest reading since March 2009, at the low point of the global recession that followed the collapse of Lehman Brothers.

    While on the other hand, weakness in the DX acted as a positive factor.

    On the MCX, all the base metal prices except Aluminium traded higher in line with international trends.


    Copper

    LME Copper prices fell by 0.4 percent as heightened concerns on demand in the world's top metals consumer after data showed the biggest fall in China's factory activity since the financial crisis. China's factory activity unexpectedly shrank to a six-and-a-half-year low in September, intensifying fears that a slowdown in the world's second-largest economy will spread. Adding to demand concerns, supply is expected to rise as Peru, the world's third-largest copper producer, will withstand slumping copper prices thanks to rising output from new projects and low operating costs that keep mining profitable.

    However, sharp losses were cushioned owing to weakness in the DX along with plunge of 0.9 percent in LME stocks.

    MCX copper prices traded higher by 0.2 percent and closed at Rs.340.2/kg owing to Rupee depreciation.


    Outlook

    We expect Copper prices to trade lower today as unfavorable China manufacturing PMI data will continue to spark concerns regarding weakness in the second biggest economy. Further, supply glut concerns will exert pressure as Peru expects to nearly double its copper output in the coming years to 2.5 million tonnes in 2018, boosted by a handful of new projects. Also, investors will keenly await German Ifo Business Climate and US Core Durable Goods Orders data due today.

    On the MCX, copper prices are expected to trade lower today in line with international trends.

    Contributed by Angel Broking
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