Strength in the US dollar coupled with mixed sentiments in the global markets led the base metals pack to trade lower on the LME in yesterday’s trading session.
Depreciation in the Indian Rupee led base metals to trade higher on the domestic bourses on Tuesday.
Zinc
However, Zinc was the only metal to witnessed gains on the LME on Tuesday mainly due to sharp fall in the metal inventories on the LME warehouse.
On a weekly basis, zinc inventories declined more than 1 percent to reach the level of 848,775 tonnes on Tuesday from the previous mark of 858,675 tonnes on 30th August 2011.
On the MCX, zinc September contract rallied 1.4 percent on account of Rupee depreciation and touched an intra-day high of Rs101.40/kg
Copper
Copper declined slightly by 0.1 percent on Tuesday mainly on the back of a stronger dollar.
But sharp decline was cushion on account of supply fears as workers at Freeport McMoRan Copper & Gold's Grasberg, the third-biggest copper mine in Indonesia has set to one-month strike from 15th September to 15th October.
Workers will be on strike unless the firm accept their demands for a rise in pay. Workers at Cerro Verde, third largest copper mine in Peru will also begin a 48-hour strike today for higher pay.
This will help copper prices to trade higher in the coming trading sessions.
Outlook
We expect base metals to trade with a positive bias today mainly on the back of from rise in risk appetite in the global markets. However, dollar strength may cap sharp gains in the metal prices.
Courtesy: Angel Commodities
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