On Friday, for most part of the day, base metal prices remained on the higher side on the back of supportive equity markets with gains of anywhere between half to two percent. However as oil prices spiked later, equities turned lower thereby sending base metal prices lower. Employment report from US indicated acceleration in job additions, at the fastest pace in nine months, in the month of February that pulled the unemployment rate further down to 8.9 percent. Factory orders accelerated and grew by 3 percent. US equity markets however shunned positive economic data and ended lower by 0.7 percent as increase oil prices raised concerns. Over the weekend, tensions in the Libya escalated thereby sending the crude oil prices higher in the morning session today. Most of the Asian equity markets are thereby trading lower with losses of anywhere between half to one percent, with the only exception being Chinese market which is trading higher by a percent. In the morning session on London Metal Exchange, base metal prices are trading mixed, with zinc trading lower by a percent while others trading largely flat. Dollar index is also trading largely flat at 76.4, in the absence of any key data triggers from US. There are no key economic data releases from other parts of globe as well. On the fundamental front, reports indicated that physical activity in China remained lack luster. Overall, given the escalation in geo-political tensions lower equity markets, base metal prices might remain under pressure. Aluminium After witnessing decline in stocks for three consecutive day, aluminium stocks on London Metal Exchange rose by 7,250 tonnes. However on a weekly basis, stocks witnessed net draw-down of 4,675 tonnes as against increase of 17,700 tonnes witnessed in the last week. The basis on LME has been moving higher indicating expectation of higher prices in the long term but subdued demand in the physical market. Copper Copper stocks on London Metal Exchange increased by 1,250 tonnes as against build-up of 500 tonnes on the previous day, thereby marking third consecutive increase. On a weekly basis too, stocks increased by 8,475 tonnes thereby marking fifth consecutive weekly increase. Cancelled warrant ratio has started to move back lower again indicating that stocks might continue to witness build-up in the near term. Lead Lead stocks on London Metal Exchange witnessed net draw down of 1,225 tonnes as against decline of 700 tonnes on the previous day thereby marking fifth consecutive decline. For the whole week, stocks witnessed 3,075 tonnes as against decline of 2,400 tonne in the previous week. Strong automobile sale numbers from US was further complemented by sale numbers in Indian where strong growth momentum continued. Nickel Nickel stocks on LME witnessed draw-down of 156 tonnes as against increase of 402 tonnes on the previous day thereby marking third consecutive decline. Cancelled warrant ratio at 7 percent of total stocks remain at higher levels indicating that stocks might continue to witness draw-down in the near term. Both open interest along with price changed only marginally thereby giving no clear indication about addition in market positions. Zinc Zinc was the top loser among the base metal as it ended with losses of two percent on LME and 1.2 percent on MCX. Zinc stocks witnessed huge build-up of 11,125 tonnes as against decline of 100 tonnes on London Metal Exchange on the previous day. Open interest increased by nearly 30 percent indicating build-up of short positions as it is accompanied by decline in prices.

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