Base metal complex ended higher, however the gains were capped after US GDP data showed the economic growth is slowing down.
US equities ended flat recouping all its losses which were witnessed after disappointing GDP data. Asian equity markets are trading higher with gains of anywhere between one to two percent.
The Dollar index is trading lower and the Euro is slightly on the higher side. In the morning session on LME, base metals are trading higher.
On the economic data front, PMI manufacturing data from Euro-Zone is expected to be stable at prior levels. From US, ISM manufacturing data is expected to come in lower which may put pressure on the Dollar.
Overall, given the strong equity markets and higher Euro the base metal complex is expected to trade higher, but given the expectation of negative economic data from US, the prices may come down later.
ALUMINIUM
Aluminium after underperforming for past few days, was the top gainer among the base metal pack
LME inventory continue to decline and witnessed draw-down of 5325 tonnes
The basis on LME continues to show a declining trend indicating that there might be price correction in the near term
COPPER
Copper was the underperformer, a result of profit booking, as indicated by cut in open interest on MCX
LME inventory came in higher and witnessed a build-up of 1975 tonnes
On the industry front, Vale SA, the World’s largest ion-ore miner, plans to buy Brazilian copper producer Paranapanema for $1.1 billion
LEAD
LME inventory came in higher for a third consecutive day and witnessed a build up of 325 tonnes
The cancelled warrant ratio is stabilizing after falling from higher levels
Increase of open interest along with the increase in basis on LME is indicating higher prices in the near term
NICKEL
LME inventory came in higher and witnessed a build up of 720 tonnes, a third consecutive build-up.
The cancelled warrant ratio is rising indicating draw-downs can be witnessed in the near term
The calendar spread is stabilizing after increasing, which might have been because of long rollovers in the far month
ZINC
LME inventory for Zinc came in higher and witnessed build-up of 625 tonnes and the cancelled ratio continues to be stable
On LME the basis is again showing a slight fall, after stabilizing in the past few days
The open interest continues to increase along with the price rise indicating long build-up
