After trading lower for most part of the day, base metal prices closed higher on the back of rebound in the US equity markets. However weak consumer confidence and decline in Richmond Fed Manufacturing Index capped the gains.
US equity markets rebounded nearly 100 points from their day lows and ended higher by half a percent. Taking cues most of the Asian equity markets have opened on the higher side with gains of anywhere between half to one percent.
Dollar index continues to loose ground and is currently trading at 78.96, lowest level in seven months.
In the morning session on LME, base metals are trading modestly lower. On the economic data front, various confidence data from Euro-zone are expected to come in mixed with consumer confidence and services confidence data remaining largely unchanged where as economic and industrial confidence data is expected to come in lower.
Indian rupee is trading higher by nearly 30 paisa on the back of buoyant equity markets and lower dollar index.
Overall, base metals are expected to trade higher on the back of positive equity markets and lower dollar index but the gains in the Indian markets might be limited owing to stronger rupee.
ALUMINIUM
LME inventory witnessed draw-downs of 3,000 Tones
On the fundamental front, Japanese shipments of aluminium products in the month of August rose by 13.1 percent to 157,112 tonnes from a year earlier
The increase in cancelled warrant ratio is also indicating that the draw-downs of inventory might continue in the near term
COPPER
LME inventory witnessed draw-downs of 2,850 tonnes after witnessing decline of 2,100 tonnes on the previous day
The basis on LME has bounced back to $5/tonne thereby bringing back the market into contango. This also indicates that tight supply in physical market was only for short term
The cancelled warrant ratio has started to inch back slowly downwards indicating that the build-up might continue for some more time
LEAD
LME inventory for Lead witnessed a build-up of 800 tonnes as against huge draw-down of 3,675 tonnes on the previous day
The higher cancelled warrant ratio was indicating significant draw-down in the offing and after the previous draw-down the cancelled warrant ratio has also moved lower
The basis on LME continues to remain at higher levels and thereby movement on either side will provide further cues as to future price direction
NICKEL
Nickel continued to under perform the entire base metal pack on the back of build-up of inventory
Inventory on LME increased by 1,176 tonnes, as against the total increase of 1,182 tonnes in the week gone by
The market continues to remain in backwardation though the premium have declined
ZINC
LME inventory witnessed decline of 675 tonnes, marking the fourth consecutive decline
The cancelled warrant ratio is slowly inching downwards indicating that the fresh intentions are not outpacing the decline in inventories
The price increased along with cut in open interest indicating short-covering
