On Friday, base metal prices ended higher with gains of anywhere between one to three percent on the back of strong equity markets and lower dollar index.
Dollar remained under pressure and ended lower by 0.6 percent as increase in interest rate by ECB kept the Euro buoyant. US equity markets however ended lower by a quarter percentage points.
Asian equity markets are trading mixed but largely are trading on the higher side. Chinese market is trading higher with gains of almost a percent after report over the weekend indicated that Chinese trade balance moved back to surplus on the back of strong export growth in the month of March. Exports grew by 36 percent while imports grew by 27 percent.
On the fundamental front, copper imports by China rose by 29 percent in March from a two year low in February. In the morning session on LME, base metal prices are trading with modest gains. Dollar index is trading largely flat.
On the economic data front, there are no key economic data releases except for industrial production numbers from India where in growth in expected to come in higher in March than in the prior month. Overall, base metal prices are expected to remain on the higher side.
NOTE: On Saturday, substantial price appreciation was witnessed in the Indian markets despite international markets remaining closed. This has disturbed the parity price and thereby metal prices in India might initially take a dip to come back to parity.
Aluminium
Aluminium stocks on London Metal Exchange witnessed draw-down of 2,700 tonnes as against decline of 4,525 tonnes on the previous day.
On a weekly basis also, stocks witnessed net draw-down of 10,300 tonnes. Warehouses in China also witnessed decline of 3,299 tonnes.
The cancelled warrant ratio has also started to increase indicating that stocks might continue to witness draw-down in the near term.
Copper
Copper stocks on London Metal Exchange witnessed build-up of 1,800 tonnes as against increase of 1,500 tonnes on the previous day.
Copper was the only metal to witness increase in stocks on a weekly basis. Warehouses in china however witnessed decline of 7,687 tonnes thereby marking third consecutive decline.
Cancelled warrant ratio continues to remain on the lower side indicating that stocks might witness build-up in the near term.
Lead
Lead stocks on London Metal Exchange witnessed draw-down of 575 tonnes thereby marking fourth consecutive decline.
On a weekly basis also stocks declined by 3,950 tonnes while warehouses in China continue to witness net build-up and to the extent of 1,401 tonnes.
The basis has declined further to -$73/tonne indicating strong demand for the metal in the physical market.
Nickel
Nickel stocks on London Metal Exchange witnessed draw-downs of 528 tonnes as against decline of 1,164 tonnes on the previous day, thereby marking fifth consecutive decline.
Cancelled warrant ratio has also moved higher indicating that stocks might continue to witness draw-down in the near term.
After moving into backwardation for a brief period, the market has moved back into contango. However cash prices are lower by a modest $6/tonne.
Zinc
Zinc was the top gainer among the base metal pack as it ended with gains of more than three percent on LME and 2.26 percent on MCX.
Zinc stocks on London Metal Exchange witnessed net build-up of 1,150 tonnes as against draw-down of 150 tonnes on the previous day. This trimmed the net weekly draw-downs to a modest 250 tonnes.
Warehouses in China also witnessed net build-up of 3,564 tonnes in the week ended April 8.
