II: Base Metals Receding, Weighed By European Debt Woes
Base metals continued to trade southwards on Wednesday amid strengthening US dollar and mounting European debt crisis contagion fears still dogged out in the market. Eurozone finance ministers agreed to leverage EFSF by introducing two options, sovereign bond partial risk protection and a co-investment approach. Meanwhile the next trance of bailout fund for Greece, at EUR 8b, was endorsed as widely expected after numerous postponement. But, the discussions on IMF support to the region's rescue fund were still elusive.
At Comex, Copper futures for most active March contract was trading at $3.363 a pound, down 0.81% (3 cents). At the SHFE, Copper futures for most active February 2012 contract settled at 54890 yuan per tonne, down 0.69% (380 yuan). Likewise at MCX, Copper for delivery in November was trading flat at Rs. 386.35 per kg.
Sentiments further weighed down by comments from a PBoC adviser in the monetary policy committee that China plans only to fine-tune its policy stance, not loosening monetary policy.
China's annual production capacity of primary aluminium may rise by 60% in the next four years as smelters build new facilities in resource-rich provinces. China Nonferrous Metals Industry Association reported on Wednesday that aluminium capacity would jump above 40 million tonnes by 2015 from 25 million tonnes forecast for the end of 2011.
China, the world's top producer and consumer of aluminium, may see annual demand grow by an average 8.7% between 2011 and 2015, down from 17.3% in the past five years. The transport and building sectors would remain the major driving forces for aluminium consumption growth in the coming four years.
The dollar index edged up by 0.06 at 79.13 against the basket of 6 major currencies amid the mixed global economic uncertainties.
Other metals in the domestic market at MCX, Nickel for delivery in November tested a high of Rs. 884.6 per kg and low of Rs. 861.5 per kg in intraday and is now trading at Rs. 871 per kg, down 1.67% or Rs. 14.8. Zinc was trading flat at Rs. 100.9 per kg. Aluminium was also trading flat at Rs. 103.35 per kg and MCX lead was also flat at Rs. 103.8 per kg.
