Copper three month delivery in LME was expected to stabilize in the first session of new week but that was not the case. Instead, prices of copper derailed to test 18 month low in the markets. LME copper three month prices were last seen trading at day's low of $ 6913.7 per tonne.
The anxiety of copper demand getting further muted after the earthquake in China is high. Chinese demand was already lackluster which after the earthquake is likely to move back further. China will be releasing its Purchase Manager's Index tomorrow which can soften copper further.
LME copper had crashed by more than 5 percent last week which was its biggest weekly fall in more than a year. Inventories are at multi year highs in copper barring today when a mild decline was noted. Total inventories have increased by 93 percent in 2013 to 613075 tonnes.
Meanwhile, Goldman Sachs today lowered its forecast of Copper for three month, six month and year. Goldman Sachs expects Copper to remain at $ 7500 per tonne in its three month estimate compared to $ 8000 per tonne. Copper six month view has been changed to $ 8000 per tonne from $ 9000 per tonne. Copper 12 month outlook has changed to $ 7000 per tonne from $ 8000 per tonne.
Among other metals, Aluminium was in surplus of 552000 tonnes in whole of 2012, as per World Bureau of Metal Statistics (WBMS). On a cumulative basis, Aluminium markets recorded a surplus of 317100 tonnes in January-February 2013, down 2.4 percent compared to a surplus of 324900 tonnes in the corresponding period last year.
The closing stocks of Aluminium at the end of February were 7.36 million tonnes, up 0.22 percent from the year ending 2012 when stocks were 7.36 million tonnes.
The LME Aluminium prices slipped below $ 1900 per tonne levels and tested a low of $ 1877 per tonne not seen since August 2012. Decline below $ 1900 has opened gates from where it can go anywhere to $ 1800 per tonne provided the conditions in financial markets remain as they are.
Nickel toppled to a low of $ 15226 per tonne, down $ 80 per tonne from last night on account of slowdown in stainless steel demand. World nickel markets were in surplus of 6000 tonnes in the month of February 2013, as compared to a surplus of deficit of 3100 tonnes in January 2013. Nickel was in surplus of 130400 tonnes in whole of 2012. On a cumulative basis, nickel markets recorded a surplus of 2800 tonnes in January-February 2013.
Indian Copper futures were trading at Rs 373 per kg, down 0.81 percent. The metal tested a low of Rs 368 per kg. Medium term support for the contract is at Rs 356 per kg while long term resistance for contract is at Rs 378 per kg.
Source by Commodity Insights
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