After trading in red for most of the day, base metal prices witnessed a pull back, on the back of short covering and bounce back of equity markets from intraday lows.
Industrial production of Euro-Zone unexpectedly witnessed contraction and Indian industrial production growth also came in lower than expectation.
US equity markets ended lower after the initial jobless claims rose as against expectation of fall from prior levels, but they pared some of the losses by time the trade closed.
Asian equity markets are trading higher, as the losses for the time being seems to be overdone. In the morning session on LME, base metals are trading higher.
The Dollar index is trading slightly on the lower side and Euro on the higher side. On the economic data front, both the German GDP and Euro-Zone GDP for second quarter are expected to indicate higher growth.
From US, Advance retail sales are expected to witness growth as against contraction in the prior month. Michigan confidence data is also expected to improve. Overall, given the expectation of positive economic data and higher Euro, we at KCTL expect the base metal prices to move trade higher.
ALUMINIUM
LME inventory witnessed draw down to the extent of 4,125 tonnes
As per the press reports, Aluminium stocks at Japanese ports rose 3.3% at the end of July to 208,200 tonnes
The basis on LME continues to remain at lower levels indicating that upside in prices might be limited in the near term
COPPER
After witnessing draw-downs for six consecutive days, Copper inventory on LME rose by 2,750 tonnes.
The cancelled warrant ratio continue to decline indicating that there build-up of inventory in the near term might continue in the near term
LEAD
LME inventory for Lead remained unchanged
The basis on LME continues to move higher indicating expectation of higher prices in the near term
On the fundamental front, Glencore International AG, has halted operations at its lead and zinc mines owing to protests
NICKEL
LME inventory witnessed build-up to the extent of 396 tonnes
The cancelled warrant ratio on LME rose indicating that there might be draw-down of stocks in the near term
On the fundamental front, Norilsk Nickel, World’s biggest Nickel producer, turned down the offer Glencore who offered to buy the entire Nickel production of the company
ZINC
LME inventory for Zinc witnessed draw-downs of 100 tonnes
The cancelled ratio continues to remain at higher levels indicating that huge draw-downs in the offing
On the fundamental front, San Cristobal, World’s sixth largest Zinc miner suspended its operations owing to regular maintenance
