Copper Rises Amid Supportive Cues From US And China

MCX Copper

futures continued to edge higher today, as global cues remained supportive. Asian stocks edged up on a decent uptick in US GDP yesterday and lack of any further taper talk from the US Federal Reserve also supported sentiments. Copper has been strained on worries posed by Chinese demand slowdown in last few days but witnessed a good recovery this week with three week lows around $3.04 auguring as good support levels. COMEX copper is up 0.37% at $3.130 per pound right now.

The US Federal Reserve stated yesterday that the information received since the Federal Open Market Committee met in June suggests that economic activity expanded at a modest pace during the first half of the year. Labor market conditions have shown further improvement in recent months, on balance, but the unemployment rate remains elevated. Household spending and business fixed investment advanced, and the housing sector has been strengthening, but mortgage rates have risen somewhat and fiscal policy is restraining economic growth. The US economy grew at an annualised rate of 1.7% in the second quarter of 2013, largely in line with the expectations after the recent surge in housing and consumer confidence data.

Meanwhile, today, China's manufacturing PMI improved slightly from 50.1 in June to 50.3 in July, but was still close to the neutral level of 50. The July reading indicates that the growth momentum of China's manufacturing sector has stayed weak, according to the National Bureau of Statistics and China Federation of Logistics and Purchasing. Ten of the twelve sub- indices were higher than their respective levels in the previous month. The rise in the headline PMI in July was largely due to the accelerating growth of output.

The US dollar has come off its six week low against the Euro and could gain further ahead of the monetary policy meetings of the ECB and the BOE. However, copper is placed rather well given the US GDP figures and Chinese manufacturing data. Unless the US dollar launches a massive rally, the metal should hold on. MCX Copper futures broke above Rs 420 per kg levels yesterday and currently trade at Rs 421.90, up Rs 0.35 per kg on the day.

Source by Commodity Insights

Copper Mired In Tentative Trades As China Cuts Overproduction Capacities

Copper......

MCX Copper

futures are trading in a tentative manner as global copper prices continued to feel the pressure of weak Chinese demand. The global equities also mostly slipped today amid flat overnight cues from the US equities and COMEX Copper continued to ease from its six-week highs. The metal is quoting down 0.36% at $3.1740 per pound in the electronics trading right now.

China's government has ordered companies to close factories in 19 industries where overproduction has led to price-cutting wars, affirming its determination to push ahead with a painful economic restructuring despite slowing growth. The industry ministry issued orders late Thursday to more than 1400 companies to cut excess capacity that has led to financial trouble for manufacturers. It also applies to producers of copper and glass and requires some companies to close outright.

China's manufacturing activity slowed to an 11-month low in July, the first evidence of the Asian economic giant losing further momentum in third quarter. In a survey published today, British banking giant HSBC said its preliminary purchasing managers' index (PMI) hit 47.7 this month, down from a final 48.2 in June and the lowest since August. The index tracks manufacturing activity in China's factories and workshops and is a closely watched gauge of the health of the economy. A reading below 50 indicates slowdown, while anything above signals expansion.

The growth in the second largest economy in world has slipped to decade low of around 7.5% and has kept a lid on copper prices over last one and half years. Rising inventories and a surplus in global market have also had a depressing effect. ICSG has reported earlier this week that the world copper markets were in surplus of 50000 tonnes in April 2013. After making seasonal adjustments, the Copper markets were in production surplus of 106000 tonnes. The world copper markets were in surplus of 266000 tonnes in the first four months of 2013.

Caterpillar Inc released disappointing second-quarter earnings on Wednesday. The industrial giant stated that it expects the global economy to grow by just a little more than 2% in 2013, slowing slightly from a pace of around 3% last year. Recovery from the financial crisis in 2009 has been very slow by historic standards. Governments and central banks have consistently overestimated inflation problems and underestimated the need for economic growth, says the company.

Copper gained mildly yesterday, cutting losses amid dollar weakness but the rise was capped amid flat US stock markets and a not very impressive data. Orders for big-ticket US manufactured goods rose 4.2 per cent in June, which was higher than expected, but the increase was driven by transportation equipment orders, a typically volatile item. The MCX Copper futures are trading in a tight range today. The counter is quoting at Rs 415.20, down Rs 2.30 per kg on the day with a massive 8% increase in the open interest.

Source by Commodity Insights

Copper Moves Higher Following Chinese Imports Data

Copper.......

Data of Chinese Copper concentrate imports led metals to trade higher on LME as well as domestic markets. The markets ignored the fact that International Copper Study Group (ICSG) has reported a surplus in the month of April 2013. The data release has come at the time when ICSG has reported decline in copper usage in China, by 7 percent.
General Administration of Customs showed that China Copper concentrate imports were 673518 tonnes, up 40.23 percent in June, compared to same period last year. The total imports in the month of January-June 2013, was 4463111, up 32 percent.
Meanwhile, ICSG reported that the world copper markets were in surplus of 50000 tonnes in April 2013. After making seasonal adjustments, the Copper markets were in production surplus of 106000 tonnes. The world copper markets were in surplus of 266000 tonnes in the first four months of 2013.
Favoring Copper was the rise of Euro against the Dollar. The US currency was trading at 1.3174 against the Euro, up 0.22 percent. The currency tested a high of 1.3138 and a low of 1.3191. LME benchmark Copper prices was trading at $ 6997 per tonne, against $ 6924 per tonne last week. Indian Copper contract was trading at Rs 419.7 per kg, up 1.23 percent. The prices tested a high of Rs 419.95 per kg. Resistance for the contract is at Rs 420 per kg.
Source by Commodity Insights

Technical Comment For the Day: Copper

Copper.......
The potential for Copper gaining ground is getting limited while the trading band is increasing significantly. Last night, the differential between the highs and lows was Rs 10, which is quite high and indicates the level of volatility this market has been facing. Caution is therefore advised in Copper moves. The prices are expected to get weak near Rs 419 per kg, which is the initial support zone for Copper. The selling can take it close to Rs 414 per kg.
SELL COPPER AT 418.5 TARGET 414 SL 420
Source by Commodity Insights

Copper Caught In Confusing Trade, LME Prices Under $7000 After 3% Gain Yesterday

Copper......

MCX Copper

futures are off from their recent highs as some profit selling is emerging in the commodity on account of Chinese growth worries. The LME three-month copper had surged around 3% yesterday on the accommodative stance of the US Fed but pared back some of these gains today and currently quotes under the key $7000 per tonne mark. The COMEX Copper is also down nearly half a percent at $3.1605 per pound.

China's economic growth rate will likely average 7% this year, Chinese Finance Minister Lou Jiwei said yesterday, according to media reports. This is much below the government's 7.5% target and would mark a slowing from 7.7% growth reported for the first quarter of this year. However, Lou also said the economy would not suffer a hard landing and that the slower growth was necessary for the reforms that the government is undertaking to further open up the economy and move away from dependence on exports.

Data out earlier in the week showed that Chinese copper imports of refined metal, alloy and products were 379,951 tonnes in June, the highest since September. China consumes some 42% of the world's copper. However, much of this spurt could be construed as traders taking advantage of low prices in LME compared to that in Shanghai and as such, would be a mere arbitrage play. The latest headline export data from China confirms that the actual demand from export heavy Chinese industries is poor. China's exports slipped 3.1% in June from a year earlier, the first decline since January 2012, the Customs Administration said on Wednesday.

The US dollar is quoting around 1.3070 against the Euro, coming off its three week low after a massive hammering yesterday. This is exerting some pressure on copper and other commodities. MCX Copper tested a high of Rs 425.25 per kg last night and closed the session with a gain of Rs 11.05 per kg with a 4% increase in open interest. The counter is quoting at Rs 420.30; down Rs 2.75 per kg on the day with around 5% increase in open interest so far. This is a trifle unclear pattern and the meta could hold on only if it maintains above Rs 420 levels.

Source by Commodity Insights

Federal Reserve Accommodative Policy Lends Support To Copper

Copper........

US Federal Reserve accommodative policy for near terms has extended helping hand for ailing Copper

. World GDP forecast decline and Chinese weak exports data on a cumulative six months were a cause of concern for prices.

US Federal Reserve governor said that the accommodative monetary policy is likely to continue in the near term and that the US jobs data released last week was not taken into consideration in the policy minutes released yesterday.

Dollar has weakened sharply on Thursday following the bashing from last night. The Dollar was at 1.3132, down 0.88 percent. The statement of Ben Bernanke has helped the metal. Markets will now focus on the report of initial jobless claims, as well as on the data on import prices.

China trade data released last night showed a drop of 0.7 percent in exports and imports. The data of fall in Chinese imports on a cumulative six months basis was cornered as markets focused on the rise of yearly imports by 9.8 percent to 379951 tonnes.

LME three month benchmark prices of Copper were trading at $ 6951 per tonne, up $ 166 per tonne. Red metal settled at $ 6784 per tonne. Indian Copper settled at Rs 412 per kg, up 0.8 percent. The prices tested a high of Rs 412.5 per kg and a low of Rs 405 per kg.

Steel material Nickel was trading at $ 181 per tonne, at $ 13731 per tonne. MCX Nickel settled trading at Rs 816.6 per kg, up 1.35 percent. The prices tested a high of Rs 821 per kg and a low of Rs 798.8 per kg.

Source by Commodity Insights

Technical Buying At the Beginning of Third Quarter Brings Cheer In Copper

Copper.......
Copper cheered on Monday and continued to move higher on Tuesday as the technical buying supported the metals. Almost all the metals posted gains as bottom fishing acted as a savior. Till the end of second quarter, Copper upside remained capped by concerns over tight liquidity in China that could weigh on demand.
Copper leapt 3.4% from Friday's close to $6,978 a metric ton on the London Metal Exchange late in the day, building on earlier gains over supply concerns. It led a rally in all base metals, as a technical recovery compensated for a sell-off in recent weeks after European and U.S. manufacturing index data came in a bit stronger.
Copper's gains were due in part to uncertainties over how soon the Mongolian government will allow Rio Tinto to start shipping copper concentrates from its major new Oyu Tolgoi mine project, which is already in an advanced ramp-up stage and has its permits.
Eurostat said consumer price inflation rose by a seasonally adjusted 1.6% in June, in line with forecasts and up from May's 1.4% reading. The rate stands below the European Central Bank's target of near but just below 2%.
In another report, Eurostat said that the euro zone's unemployment rate rose to a seasonally adjusted 12.1% in May, from April's reading of 12%.
Meanwhile, US Institute for Supply Management said its index of purchasing managers rose to 50.9 in June from a reading of 49.0 in May.
LME three month forward prices of Copper ended at $ 6918 per tonne. The prices were last seen trading at $ 6952 per tonne. Meanwhile, MCX Copper closed at Rs 417.1 per kg, up 2.5 percent. The prices are resisted at Rs 420 per kg, while support is at Rs 415 per kg.
Source by Commodity Insights

Second Straight Day Of Slump In Lead

Lead.......
Battery material lead has slumped for the second straight day. The metal saw a decline of 1.29 percent in the opening ticks on MCX, giving very little chance for new sellers to enter in the market. The open interest in the contract has increased to 5705 contracts from last night open interest of 5514 contracts. So far 2845 kg of Lead has been traded.
MCX Lead contract was trading at Rs 118.25 per kg; this is a 26 day low for the metal in the exchange. The prices are expected to slip to Rs 115 levels if the psychological barrier of Rs 118 is broken.
LME three month Lead prices were at $ 1988 per tonne, as against $ 2002 per tonne on yesterday's close.
Source by Commodity Insights

Nickel Expected To Extend Losses

Nickel.......

LME Nickel prices were seen extending their losses on the back of heightened profit booking after the China reported decline in manufacturing numbers. Nickel has been of the metals that has suffered losses of 19 percent this year. The rise of supplies in the world markets and drop in demand of stainless steel has pressured this metal. LME three month prices was trading at $ 13757 per tonne on Friday. MCX Nickel benchmark contract was trading at Rs 815.5 per kg, down 0.6 percent. The prices tested a high of Rs 821.4 per kg and a low of Rs 815.7 per kg. This month, China State Reserves Bureau decided to buy 60000 metric tonnes of Nickel in 2013 .This has brought some gains in Nickel at the beginning of the month. Although this is not a major quantity considering the heavy supplies that is unused in China and world over. Source by Commodity Insights

Copper Stands On Weak Ground

Copper.......

Copper

remains stranded by the disinterest of traders in buying the metal. The traders remained on a selling spree with price paring 0.25 percent in the opening trades on Indian MCX platform. This is a extended sell off continuing in the metals. Recovery in Indian Rupee from 59.97 levels last night can create some more ripples of pressure in the Copper. MCX Copper is trading at Rs 403.35 per kg and can move near Rs 400 in the trading session.

LME three month prices will be looking at finding supports at 20 month low levels. However, inventories will be a key trigger for the metal in today's session. The opening of European markets in few hours time will be watched out for. LME Copper was at $ 6828 per tonne, down $ 7 per tonne from yesterday.

Copper is finding some aid from the fact that there is still short term supply pressure in the markets. Supply outages at Grasberg and Utah copper mines have slashed off some of the surplus that was expected early in the year.

Source by Commodity Insights

Refined Zinc Markets In Surplus Of 155600 Tonnes In January-April 2013: WBMS

Zinc........

World Bureau of Metals Statistics (WBMS) has come up with its numbers for major metals. The agency has said that World Zinc markets were in surplus of 5000 tonnes in the month of April 2013, as compared to a surplus of surplus of 29500 tonnes in March 2013.
Zinc was in surplus of 243100 tonnes in whole of 2012. On a cumulative basis, Zinc markets recorded a surplus of 155600 tonnes in January-April 2013, down 6.7 percent compared to a surplus of 166800 tonnes in the corresponding period last year. The closing stocks of Zinc at the end of April were 1.06 million tonnes, down 9.4 percent from the year ending 2012 when stocks were 1.17 million tonnes.
World mined Zinc production in April 2013 was 1.068 million tonnes, down 2.23 percent from 1.093 million tonnes in March 2013. In January-April 2013, World mined Zinc production was 4.22 million tonnes, up 1.2 percent compared to 4.17 million tonnes in January-April 2012.
Refined Zinc production was 1.11 million tonnes in April 2013, down 0.88 percent compared to 1.12 million tonnes in March 2013. In January-April 2013, World refined Zinc production was 4.34 million tonnes, up 6.7 percent compared to 4.09 million tonnes in January-April 2012.
China refined Zinc production in January-April 2013 was 1.72 million tonnes, up 11 percent from 1.55 million tonnes in January-April 2012. China produced 40 percent of total Zinc produced in the world. China production of refined Zinc in April was 452900 tonnes, down 2.9 percent compared to 466800 tonnes in March 2013.
Refined production of Zinc in Japan was 202800 tonnes in January-April 2013, up 0.84 percent from similar period last year. Production of Zinc was up to 46200 tonnes in April 2013 compared to 55500 tonnes in March 2013.
Refined production of Zinc in EU27 was 666000 tonnes in first four months of the year, up by 3.4 percent than 644000 tonnes in first four months of 2012.
Meanwhile, World refined Zinc consumption was 4.18 million tonnes in first four months of the year, up 6.3 percent from 3.93 million tonnes in January-April 2012. Chinese refined Zinc consumption was 1.92 million tonnes in January-April 2013, up 12 percent from 1.71 million tonnes in January-April 2012. China consumed 46 percent of total Zinc consumed in the world.
Refined Zinc consumption in US declined by 2.6 percent to 299500 tonnes in January-April 2013 compared to 307400 tonnes in similar period last year. Consumption of EU 27 was 556600 tonnes in January-April 2013, from 568300 tonnes in January-April 2012.
Source by Commodity Insights

Nickel Static In Indian Markets

Nickel......
Nickel has been one of the underperformer among the metals space and has lost 11 percent this year in spot markets. The prices of spot Nickel closed at Rs 819.1 per kg on 18 June 2013. Nickel is in contango considering the futures prices that are ruling at Rs 828.6 per kg. The prices were static in the morning hours of trade on MCX though some recovery is expected as the day progresses that too on account of Rupee tracking further losses against the Dollar. The INR was trading at 58.76 against the Dollar.
Source by Commodity Insights

Sideways Trading In Nickel Futures

Nickel......

Nickel futures are trading in a sideways manner in the Asian trading session. The steel material nickel was trading at $ 14132 per tonne, up $ 22 per tonne. Baosteel and other major Chinese players have revised the prices of steel material downwards. The rise in production is also a cause of worry though many players are trying to reduce the production on lower demand.
Baosteel, the country's biggest listed steelmaker, sees China's steel production rising just 1-2 percent in 2013 from a year ago. China produced 716.5 million tonnes of crude steel in 2012, up 3.1 percent from year ago.
MCX Nickel was trading at Rs 819.7 per kg, up 0.16 percent. These are one month low levels for Nickel. The prices have supports at Rs 816 per kg while Resistance is at Rs 821 per kg.
Source by Commodity Insights

LME Aluminium Falters On Worries of Heavy Stocks

Aluminium...........
All time high inventories of Aluminium has again become a cause of worry for the metal. Aluminium is used extensively in car bodies and cheaper electricity wiring compared to Copper. However, the prices have fallen for the fifth straight session as the warehousing stocks have started to swell once again.
Inventories of Aluminium increased by 15725 tonnes on Wednesday to 5214150 tonnes. Although this year the inventories have gained by 4100 tonnes but the all time high levels are still restored.
LME Aluminium was trading at $ 1869 per tonne, down $ 12 per tonne. This is a two week low for Aluminium. On MCX, Aluminium benchmark contract was trading at Rs 107.6 per kg. The disparity between Indian and LME exchanges continues after the Rupee regained its sloping journey against the Dollar. Rupee was quoting at 58.45 against the Dollar, down 1.1 percent.
Source by Commodity Insights

Nickel Feels The Pinch In Opening Trades On MCX

Nickel.......

The demurring of prices of Nickel in the Asian session was indicating only one thing that the prices of Nickel in MCX will open in red. The decline of Dollar against the Rupee has made this easier.
Nickel has opened in red on MCX with benchmark contract last seen trading at Rs 840 per kg, down 0.41 percent. The metal is at its 12 day low in Indian markets. Last night, MCX Nickel was the worst performer in the base metals pack, ending at Rs 844.1 per kg, down 2.7 percent.
LME three month prices were trading down by $ 54 per tonne to $ 14496 per tonne. This is the fifth consecutive day of decline in Nickel.
Source by Commodity Insights

Nickel Marches Higher On MCX

Even as the steel demand is in doldrums and there are calls that the lackluster trend will continue in world markets on growth of supplies, Nickel prices in Indian markets charged for the fourth consecutive day on the back of depreciating Rupee against the Dollar. The Rupee is trading at all time low of 58.83 per Dollar, down 1.17 percent.
MCX Nickel was trading at Rs 873.9 per kg, up 0.8 percent. The markets tested a high of Rs 878 per kg and a low of Rs 870.7 per kg. The prices can test Rs 890 per kg, if the continuous decline in Rupee doesn't stop.
LME three month Nickel prices declined by $ 92 per tonne and were trading at $ 14853 per tonne. This is three day low for the metal. Nickel inventories has been growing at a rapid pace in LME warehouses and have now reached 182436 tonnes, up 30 percent this year.
Source by Commodity Insights

Gold Slips In Asia; Yen Rises

Gold futures slipped in the electronic session today, with the Asia equities trading mostly lower after Bank of Japan held its asset-buying and other policy elements unchanged and upped the economic outlook.
The policy announcement sent the yen rising and pushed stock futures lower. The central bank said "Japan's economy has been picking up" and "exports have started picking up," after saying at its last meeting on May 22 that the economy "has started picking up" and "exports have stopped decreasing." It also said "some indicators suggest a rise in inflation expectations."
Australia resumed trading after closing on Monday for a public holiday, getting its first chance to react to the events that influenced the previous session — namely, last week’s forecast-beating U.S. nonfarm payrolls data and disappointing Chinese economic data that came out over the weekend.
Markets in mainland China remained closed for a three-day public holiday, though Chinese companies listed in Hong Kong remained weighed by the poor economic data out over the weekend. The Hang Seng China Enterprises Index was down 0.5% and the Hang Seng Index was off 0.5%.
Gold for August delivery is trading down $ 3.2 at $ 1382.8 per ounce on the New York Mercantile Exchange. It ended with a gain of $3 an ounce, or 0.2%, at $1,386 yesterday.
Gold and other precious metals entered the week on the back foot after last week’s U.S. employment data. Also casting a cloud over gold futures, China over the weekend released a round of weaker-than-expected economic data that indicated growth slowed in May.
MCX August gold futures may open today’s session near Rs 27940 levels with support around Rs 27850- 770 levels.
Source by Commodity Insights

LME Aluminium Inventories Jumped By 18750 Tonnes In Single Day

LME Aluminium inventories jumped by as much as 18750 tonnes in the single day on 9 June 2013. The rise is probably on account of closure of Chinese markets for Dragon Boat festival which will mean lower demand for metal in spot.
The rise in Aluminium was followed by sharp decline in prices. After the announcement of 0.36 percent rise in Aluminium the prices have moved down by $ 40 per tonne to $ 1928 per tonne.
MCX Aluminium didn't follow the footsteps of its counterpart and was up 0.64 percent mainly due to decline of Rupee to all time lows against the Dollar. Rupee was trading at 57.74 when last checked, up 1.2 percent.
Source by Commodity Insights

Lead Opens In Red Even As Rupee Remorse Continues

Lead........

Lead and other base metals have opened in red even as Rupee regret continued against the Dollar. The markets were expected to open with pressure on account of profit booking in London Metal Exchange but the support of Indian Rupee seems to be missing in first half and hour of trading. INR was trading at 56.85 against the Dollar, down 0.23 percent.
Battery material lead has been powerfully performing in the base metals pack on the back of renewed demand from battery manufacturers and recovery in China manufacturing data. The inventories have been declining all through this year. Meanwhile Indian problems have remained intact.
The interest rates are still higher and RBI next move is eagerly watched by the industry. The demand side is so lackluster that the automobile manufacturers are trying to woo customers with attractive discounts.
The waiting time is also limited to some segments of automobile markets. In fact in passenger car segment, most of the versions are available on demand which was not the case few years back when waiting period extended to as much as 2 to 3 months.
LME Lead was seen at $ 2217 per tonne, against $ 2244 per tonne on Wednesday. The prices are still at two and half months high. Meanwhile, MCX Lead was at Rs 126.6 per kg, down 0.5 percent. Prices can correct towards Rs 125 per kg in coming days on profit booking.
Source by Commodity Insights

LME Nickel Tests 15 Day High

Nickel.........

The news of Federal Reserve continue to assist the economy by $ 85 billion bond buying programme coupled with China State Reserve Bureau purchases of Nickel has amplified buying interest. The material used for the preparation of austenitic steel grades moved to a 15 day high on London Metal Exchange. The benchmark three month prices were ruling at $ 15295 per tonne, up $ 15200 per tonne.
The Federal Reserve President Dennis Lockhart comments have come at a critical time for commodities. The prices were dull and lackluster up until yesterday but statements from Lockhart that US Federal bank was committed to economic stimulus programme and reduction was not justified at the moment brought cheers.
Furthermore, supports have emerged from China State Reserves Bureau decision to buy 60000 metric tonnes of Nickel from International markets in 2013. Although this is not a major quantity but the restart of such buying is a promising sign. Refined Nickel demand has often been challenged by a cheaper substitute Nickel Pig Iron.
MCX Nickel June contract was the only one in green on Wednesday. The prices were trading at Rs 866.5 per kg, up 0.36 percent. The metal tested a high of Rs 867 and a low of Rs 862.5 per kg.
Source by Commodity Insights