• Industrial metals (copper, aluminium, nickel, etc.) daily review (September 28, 2015)

    Base Metals

    Base metals on the LME apart from Nickel traded lower last week as Chinese flash estimate of its Purchasing Managersí Index fell to the lowest reading since March 2009, the low point of the global recession that followed the collapse of Lehman Brothers.

    Asian Development Bank cut its growth forecasts for China, and said ebbing consumption of raw materials in the nation would hurt commodity-focused exporters like Mongolia and Indonesia.

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


    Copper

    LME Copper prices plunged by 4.4 percent as a stronger dollar after Federal Reserve Chair Janet Yellen said she expected a rate hike in 2015 and US GDP data supported the same. U.S. economy rose at a 3.9 percent annual pace in the April-June quarter, up from the 3.7 percent pace reported last month on stronger consumer spending and construction, the second upward revision in a row. In addition, 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.

    Also, worse-than-expected economic growth in the first half for most Asian economies and a delayed global recovery led the Asian Development Bank to cut its regional forecasts for this year and next. Further, the ICSG said the global refined-copper market showed a surplus of around 20,000 tons in the first half of 2015, compared with a deficit of 576,000 tons in the same period last year.

    MCX copper prices traded lower by 3.6 percent and closed at Rs.337.8/kg in line with international trends.


    Outlook

    We expect Copper prices to trade lower today as U.S. economy expanded more than previously estimated in the second quarter supporting the case for an interest rate rise before the end of the year. Also, investors will remain at bay ahead of Chinese weeklong National holiday starting October 1.

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