Friday, May 9, 2008

LME Copper Lost

Base metals prices were expected to show some downturn in the evening trades after the poor show in the opening trades and that happened although Dollar was weak against the majors after the rate decision from Bank of England and ECB. As per the expectations BOE hold the key rates at 5% on inflationary concerns while ECB went undeterred at 4%.

LME Copper lost by $ 120 in London trade to close $ 8315 per tonne. The dollar was modestly lower Thursday, losing ground to the euro and the pound after both the European Central Bank and the Bank of England both decided to hold policy steady. ECB President Jean-Claude Trichet cited inflation risks in his statement, further bolstering the common currency.

The dollar index, which measures the greenback against a basket of six major currencies, fell 0.2% to 73.37. Dollar weakness typically benefits dollar-denominated commodities, such as gold and crude oil, because it makes them cheaper for holders of other currencies.

LME Copper Inventories data for the day showed a appreciation of 1100 tonnes to 110125 tonnes in Copper inventories. MCX Copper for June expiry closed the day at Rs 345.50 per kg down almost Rs 2, Copper will find Supports at 344 and 342 levels today while Resistances are at 350 levels.
The end of a 20-day contract workers' strike at Codelco in Chile, the world's largest copper producer, has calmed fears of a supply short-fall for the red metal, taking the heat out of recent price gains.

MCX Aluminium May expiry contract closed the day Rs 118.5 per kg down Rs 0.30, Resistances for the contracts are at 120 levels with Supports at 117.70. Nickel closed the trading at Rs 1139 per kg down Rs 28.50, Supports for the contract are at 1135 with Upper Cap at 1177 levels. Zinc and Lead closed at Rs 92.30 and Rs 97.25 per kg respectively. Zinc will find resistances at 94 levels with Lower level support at 91 levels, on the other hand Lead Supports will be at 96 levels with Resistances at 101 levels.

In other metals traded on the LME, Zinc for delivery in three months closed at $ 2210 per tonne against $ 2240, Zinc Inventories data showed a rise of 375 tonnes to 125725 tonnes, while Aluminium was down at $ 2880 per tonne down $ 35. Inventories data for Aluminium showed a depletion in the inventories to the tune of 925 tonnes to 1038350 tonnes. Lead closed the trading at $ 2315 per tonne against $ 2415 per tonne, while Nickel lost heavily to close at $ 27250 per tonne against $ 28400. Tin went up by $ 400 till the close at $ 24400 per tonne as against $ 24000.

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