The base metal complex witnessed huge buying interest ending with gains of anywhere between one to three percent on LME. The gains on MCX however were capped owing to stronger Rupee. Copper was the top performer registering gain of 3.30 percent on LME and 2.64 percent on MCX
According to the World Bureau of Metal Statistics, in first five months of 2010, the World Copper market was in surplus by 73,000 MT as against deficit of 56,200 MT in the same period in 2009
On the fundamental front, reports stated that South Korea bought 3,000 MT of copper cathodes in a tender by paying premium higher than paid by it in the last month
Fed Chairman Ben Bernanke iterated that the economic outlook is unusually uncertain and the central bank was prepared to take further steps to boost the economy, if required. However, lack of details of the actions that the central bank might take disappointed the market
Freeport Copper and Gold Inc., one of the World’s largest copper producer, expects the copper demand to remain robust and is witnessing strong order inflows
OUTLOOK
The US equities, after the testimony of Ben Bernanke, witnessed a downturn, ending the day down by more than a percent. This has pushed most of the Asian equities lower. The Euro is trading slightly in positive after losing around a percent yesterday
From the economic front, the Euro Zone and German PMI data is due to be released. The data is expected to come in lower, as the economic situation there continues to be grim. This can push the base metal prices lower
From US, Existing home sales and housing price index data will be released. The housing market continues to be depressed and so both the sales and the price are expected to decline. Housing sector is the top user industry of base metals and so any negative indication from this sector will push base metal prices lower
Overall, we expect the base metal prices to come down and one can initiate buying at lower levels
