Base metals futures have opened strong on the MCX as a mild uptick in the Euro in the morning trades and a recovery in crude oil prices supported the sentiments for commodities. MCX Copper futures went above Rs 306 as the commodity tested highs of $3 per pound for the benchmark futures on COMEX in the electronic trades and the ideas that falling inventories on the LME would support the prices kept the sentiments well supported.
The commodity has witnessed a good recovery in the last session following bullish data on global supplies. The commodity rose as the International Copper Study Group reported that copper market was in deficit in March for the first time since September as production fell 113,000 metric tons below demand. The world refined-copper market was in deficit by 1,000 tons in the first quarter, compared with a year-earlier surplus of 139,000 tons.
However, the housing picture remains very weak. The U.S. Census Bureau said yesterday that new home sales were at an annual rate of 300,000 in May, down 32.7% from April's pace and much less than expected. It was the lowest month for new home sales since records began in 1963. So far in 2010, new home sales are up 6% from a year ago. The new home sales, the lowest level on record, were much worse than the 410,000 units that analysts had expected.
Earlier in the week, the National Association of Realtors of US reported that the existing home sales surprisingly fell by 2.2% in May to a seasonally adjusted annual rate of 5.66-million from April's revised 5.79 million figure. This was much less than expected and indicated that the expiry of Federal Tax credit for home purchases is having a negative effect on the housing sector, as expected.
COMEX Copper quotes at $2.9960, up 6.50 cents or more than 2% on the day after hitting a high of $3.006 per pound. MCX Copper futures hit a high of Rs 306.50 per kg and currently trade at Rs 306.40, up 1.32%. The commodity closed at Rs 302.45 per kg yesterday, down Rs 1.35 per kg after managing to hit a high of Rs 305.20. Aluminum is at Rs 89.85, up 0.80% while Zinc quotes at Rs 84.50, up 1.44% on the day for the June deliveries.
