US Jobless Data Support Base Metals To End On Mixed Trend

Base metals prices performed mixed and prices of Aluminum and Nickel retreated as jobless claims from US came slightly more than expected weakening Dollar index. Greece optimism has pushed global equities northwards and Euro currency also appreciated by 0.96 percent extending gains to metals pack.

Today, morning base metals are trading positive by 0.4 to 1.4 percent at LME electronic platform as anticipation over Greece optimism coupled with better US non-farm releases. The Asian equities are also trading up by almost a percent and are expected to remain on the gaining side.

After weak GDP release from Japan, China’s consumer price appreciated less than expectation and it might continue to support gaining prices as the government has provided easing twice in the last 4 months.

However, the industrial production is expected to decline and this may have slight negative impact. From the Euro-zone, Greece bond swap has already converted 155 billion Euros from total 177 billion Euros and this may continue to have positive impact on metal prices.

The German releases are also expected to be handy and hence Euro may continue to gain. In late evening the US releases are also expected to be handy as nonfarm payrolls may increase with similar unemployment rate may support dollar index extending gains to base metals.

Therefore, we expect prices to recover from earlier losses as better equities coupled with eco-friendly releases may continue to support gaining prices.

Aluminium

Aluminum prices retreated by 0.14 percent at LME while at MCX prices came down by 0.50 percent consecutively for the fourth day.

Fundamentally the demand for the metal has slowed comparatively as inventories continue to stockpile at Shanghai warehouses indicating stockpiling, even at LME inventories have continued to witness stockpiling.

Prices are expected to mostly remain downside as weak Chinese CPI coupled with weak Euro-zone may continue to weigh on metal prices, however slight pullback may be expected during US economic releases.

Copper

Copper prices gained after retreating for three days and prices came up by 0.42 percent at LME, while at MCX gains were limited to 0.15 percent due to rupee and less participation.

Copper inventories continue to witness drawdown and cancelled warrants are also maintaining above 30 percent indicating spot demand and with better US employment red-metal prices are expected to recover slightly.

However, Copper prices may closely follow the Eurozone developments and may remain weak during the day, expecting prices to recover during non-farm releases.

Lead

Lead prices recovered after remaining mostly weak and prices came up by 1.63 percent as optimism in the market has returned after 85 percent Greece swap deal.

Fundamentally, lead demand has witness contraction as cancelled warrants continue to decline, yet declining inventories might have slight positive impact on prices.

Metal prices are expected to remain weak during the day, while slight pullback might be expected during US non-farm releases

Nickel

Nickel prices came down by 0.53 percent at LME, while at MCX prices retreated by 1.47 percent as jobless claims from US increased slightly.

Fundamentally, the spot demand has improved and the inventories have continued to decline but prices are expected to remain bearish for short term due to demand side constrains lingering on alloys.

Prices may continue to witness downtrend mostly during the day and slight recovery might be witnessed during US releases.

Zinc

Zinc was the top gainer and prices gained by 1.71 percent at LME, while at MCX prices gained 1.43 percent due to Euro-zone optimism.

Fundamentally, Zinc inventories are maintaining higher levels but still medium term supply constrains may continue to support gaining prices.

Today metal prices are expected to continue the bullish trend as strong equities and better economic releases may continue to support price gain.