Base Metal prices ended lower with losses of anywhere between one to two percent on the back of lower equity markets and cautious approach ahead of Chinese data. Dollar index ended lower with losses of half a percent. S&P downgraded Greece’s credit rating by two notches raising concern about default.
US equity markets ended largely mixed, largely consolidating as positive M&A announcements supported prices while concerns about the economic recovery limited the upside.
Asian equity markets are trading higher with gains of anywhere between half to one percent supported by Chinese data. Chinese consumer prices rose by 5.5 percent in the month of May, largely in line with expectation.
Industrial production numbers came in better than expected while the retail sales moderated slightly. In the morning session on LME, base metal prices are trading with modest gains of half a percent. Dollar index is trading marginally lower at 74.4 levels.
On the economic data front, US producer price index is expected to come in slightly lower while the retail sales might witness contraction. Business inventories are also expected to have increased in May.
Overall, base metal prices might open on the higher side tracking higher equity markets however data from US is expected to come in slightly on the lower side. Technically, prices are expected to remain under pressure.
Aluminium
Aluminium prices declined by more than one percent on both LME and MCX.
Aluminium stocks witnessed draw-downs of 9,000 tonnes from London Metal Exchange thereby marking 13th consecutive draw-down.
On the fundamental front, at the end of the May month aluminium stocks at three of the major Japanese ports increased by 6,300 tonnes to 225,400 tonnes.
Copper
Copper prices though ended lower, losses were limited as continued disruption in output at mine in Chile supported prices.
After witnessing increasing stocks for five consecutive sessions, copper stocks on London Metal Exchange witnessed draw-downs of 2,175 tonnes.
Cancelled warrant ratio of copper however has also declined along with decline in inventory indicating that withdrawals from previously earmarked for stocks.
Copper
Copper prices though ended lower, losses were limited as continued disruption in output at mine in Chile supported prices.
After witnessing increasing stocks for five consecutive sessions, copper stocks on London Metal Exchange witnessed draw-downs of 2,175 tonnes.
Cancelled warrant ratio of copper however has also declined along with decline in inventory indicating that withdrawals from previously earmarked for stocks.
Nickel
Nickel prices continue to underperform most of the other base metals and ended lower with losses of more than two percent.
Nickel stocks on London Metal Exchange witnessed draw-downs of 390 tonnes. Cancelled warrant ratio on LME has also declined along with decline in stocks indicating draw-downs from the stocks which were previously earmarked for delivery.
Open interest increased by more than 26 percent indicating build-up of short positions.
Zinc
Zinc prices ended lower with losses of 0.35 percent on LME while on MCX prices ended lower by 0.6 percent.
On London metal Exchange zinc stocks witnessed draw-downs of 350 tonnes.
Cancelled warrant ratio continues to remain at near 1 percent of total stocks and the basis on LME continues to remain at average levels of $20/tone thereby giving no clear indication for price direction.
Courtesy: Karvy Commtrade Ltd.
Get Trading Tips that suits your kind of investment at tips.commodityonline.com
