Base Metals Settle Lower On Poor Manufacturing Data: April 24, 2012

Escalating tensions with respect to eurozone debt crisis, unfavourable manufacturing and services PMI data from the eurozone front and strength in the US Dollar Index exerted downside pressure on the base metals pack on the LME in yesterday’s trading session.

Additionally, risk in risk aversion in the global markets also acted as a negative factor for metal prices. However, depreciation in the Indian currency cushioned further decline on the domestic bourses on Monday.

Copper

Copper, the leader of the base metals complex, declined almost 2 percent on the LME and by 0.5 percent on the MCX on Monday.

A stronger dollar coupled with rising worries over Europe’s debt crisis exerted downside pressure on the red metal prices yesterday. Copper touched an intra-day low of $7977.25/tonne and ended its trading session at $8043/tonne on Monday.

On the MCX, Copper April contract touched an intra-day low of Rs. 419.60/kg and closed its trading session at Rs. 422.70/kg yesterday.

Crude Oil Tumbles On China's Demand Concerns

Nymex crude oil prices declined around 1 percent yesterday taking cues from slowdown in crude oil consumption in China coupled with a stronger Dollar Index.

China’s crude oil demand dropped to 9.51 million barrels a day in March which at the lowest level since October 2011. The country ranks second in consumption of world crude oil at 11 percent in 2010 only after US which accounted for 21 percent of world crude oil in same year.

As per the International Energy Agency (IEA) China increased the retail gasoline and diesel prices in last month which will further reduce the demand for the commodity.

Oil prices touched an intra-day low of $101.82/bbl and closed at $103.11/bbl in yesterday’s trading session. On the MCX, crude oil prices gained by 0.1 percent on account of depreciation in the Indian rupee and closed at Rs.5,443/bbl after touching an intra-day high of Rs.5,451/bbl on Monday.

API Inventories Forecast

The American Petroleum Institute (API) is scheduled to release its weekly inventories today and US crude oil inventories are expected to increase by 2.9 million barrels for the week ending on 20th April 2012.

Gasoline stocks are expected to decline by 0.7 million barrels and distillate inventories are expected to rise by 0.3 million barrels for the same week.

Natural Gas

Nymex natural gas prices increased by 4.6 percent yesterday on the back of industrial demand for the commodity and a freezing storm hit the  North Eastern coast. However, further upside in prices was restricted on account of a stronger Dollar Index.

Gas prices touched an intra-day high of $ 2.022/mmbtu and closed at $ 2.02/mmbtu yesterday. On the MCX, gas prices gained by 4 percent and closed at Rs.104.8/mmbtu after touching an intra-day high of Rs.106/mmbtu on Monday.

Precious Metals Under Pressure On Firm US Dollar

Spot gold prices came under pressure in yesterday’s trading session on account of strength in the US Dollar Index, as a stronger dollar makes dollar-denominated commodities look expensive for holders of other currencies.

Additionally, weak sentiments in the global markets due to rising concerns over Europe’s debt crisis also acted as a negative factor for the yellow metal prices on Monday.

On the MCX, Gold June contract rose around 0.5 percent  as  a weaker rupee led gains on the domestic platform and touched an intra-day high of Rs.28,805/10 gms yesterday.

Silver

Silver prices dropped sharply by 2.8 percent on the international markets on Monday taking cues from strength in the US Dollar Index along with downside in base metals pack. In addition to this, rise in risk aversion in the markets due to eurozone debt worries also exerted further downside pressure on prices.

The white metal touched an intra-day low of $30.45/oz and ended its trading session at $30.76/oz yesterday.

MCX Silver May contract decline around 1.6 percent and touched an intra-day low of Rs55,303/kg. However, depreciation in the Indian rupee cushioned further fall on the MCX on Monday.