Mixed Trend In Base Metals, Copper Falls On Chinese Demand Concerns

The base metals complex delivered a mixed performance on the LME on Tuesday, with copper, nickel and lead ending lower while aluminum and zinc ended in a positive territory.

Strength in the US dollar index, rise in risk aversion in global markets and mounting worries with respect to slowing demand from China, the world’s largest metals consumer, acted as a negative factor for the base metal prices yesterday.

Additionally, unfavorable consumer confidence data from the US also exerted further downside pressure on base metal prices on Tuesday. Appreciation in the Indian rupee led further losses on the domestic bourses.

Nickel

Nickel was the worst performer amongst the base metals pack on Tuesday, as the metal dropped sharply by 2.5 percent on the LME and almost 3 percent on the MCX.

Sharp rise in the metal inventories, strength in the US dollar index and choppy market sentiments acted as a negative factor for prices.

LME inventories of nickel rose by 1.6 percent to 99,222 tonnes on Tuesday. Nickel prices touched an intra-day low of $17,781/tonne and closed at $17,800/tonne yesterday.

MCX Nickel March contract touched an intra-day low of Rs. 906.70/kg and closed at Rs. 907.90/kg on Tuesday.

Crude Oil Settles Lower On Rising Inventories

Nymex crude oil prices traded lower by 0.3 percent in yesterday’s trading session on the back of rise in US inventories coupled with strength in the US dollar Index.

Additionally, rising expectations that US may release its strategic oil reserves in order to offset supply disruption from Iran also acted as a negative factor for oil prices.

Crude oil prices touched an intra-day low of $106.52/bbl and closed at $106.76/bbl yesterday.

On the MCX, prices declined by 0.1 percent and closed at Rs. 5,473/bbl after touching an intra-day low of Rs. 5,450/bbl on Tuesday.

API Inventories Data

As per the American Petroleum Institute (API) report yesterday, US crude oil inventories increased by 3.6 million barrels to 351.5 million barrels for the week ending on 23rd March 2012.

Gasoline inventories rose by 1.34 million barrels to 226.3 million barrels and whereas distillate inventories declined by 1.45 million barrels to 136.6 million barrels for the same week.

EIA Inventories Forecast

The US Energy Department (EIA) is scheduled to release it weekly inventories report today at 8:00pm IST and US crude oil inventories are expected to increase by 2.6 million barrels for the week ending on 23rd March 2012.

Gasoline stocks are expected to decline by 1.30 million barrels whereas distillate inventories are also expected to fall by 0.1 million barrels for the same period.

News

As per the International Energy Agency (IEA) statement yesterday, crude oil consuming nations will have to pay around $2 trillion in this year for oil imports, if crude oil prices continue to trade at current prices.

Crude oil importing nation’s bill accounted for $1.8 trillion in 2011 which is up from $1.7 trillion in 2008.

Precious Metals Decline On Firm Us Dollar

Spot gold prices declined around 0.6 percent on Tuesday on the back of strength in the US dollar index, as a stronger dollar makes dollar denominated commodities look more expensive for holders of other currencies.

Additionally, weak sentiments in global markets also acted as a negative factor for the yellow metal prices.

Gold touched an intra-day low of $ 1678.50/oz and ended at $ 1679.44/oz on Tuesday.

MCX Gold April contract declined by 0.3 percent and touched an intra-day low of Rs. 28,242/10 gms and closed its trading session at Rs. 28,280/10 gms yesterday.

Silver

Spot silver prices traded lower by 0.8 percent in yesterday’s trading session, taking cues from fall in gold prices coupled with mixed performance in base metals pack.

In addition to this, strength in the US dollar index also acted as a negative factor for the white metal prices on Tuesday.

Silver touched an intra-day low of $32.45/oz and ended its trading session at $32.54/oz yesterday.

MCX Silver May contract dropped around 0.6 percent and touched an intra-day low of Rs57,330/kg on Tuesday.