Base metal prices ended slightly on the higher side on the back of weak dollar index and strong empire manufacturing data. However, NAHB housing market index came in lower and has lowest level since March ’09.
US equity markets closed on a flat note after trading in a very narrow rage. Asian equities are trading slightly on the higher side, with the exception of Nikkei, which is trading lower by half-a percent on the back of weak Q2 GDP numbers and concerns of strengthening Yen. In the morning session on LME, base metals are trading with modest gains.
On the economic data front, US industrial production data and capacity utilization data for the month of July are expected to come in higher, indicating modest pick up in the industrial activity. Housing starts in the month of July are expected to increase whereas building permits might have declined, giving a mixed picture on housing market.
However, the actual data might vary significantly as the economic conditions are not very encouraging. Overall, we at KCTL, expect the base metal prices to trade slightly on the higher side.
ALUMINIUM
LME inventory witnessed draw down to the extent of 4,425 tonnes, third consecutive draw-down
The basis on LME is touching new lows, even in an oversupplied market indicating that the physical demand in the near term is higher
On the fundamental front, the panel set-up by the Indian environment ministry to look into the Vedanta’s planned aluminium mine in Orissa said that the proposal should be rejected. The mine would help the company in reducing its raw material costs
COPPER
Copper inventory witnessed draw-down to the extent of 1,850 tonnes
Cancelled warrant after falling for may days, have risen by nearly 20%, the highest reported since early in the June -10
On the fundamental front, Canada's Anvil posted profit second quarter and it agreed to hedge about 100% of its expected copper production for the remainder of 2010. The company expected production for the full year 2010 is at 15,000 tons
