By Rushabh Mehta
AHMEDABAD (Commodity Online):Base metals are expected to trade range bound and choppy.by US,China cut the reserve ratio by 50 bps last week and this week ECB is also expected to cut the bank rate and announce long term purchasing of bonds in order to help banks and boost the economy.
Copper:Prices may come under pressure as uncertainty looms over Greece debt restructuring. Further putting pressure on prices is slight rebound in US Dollar and choppiness in global equities. The downside however remains capped amid optimism of robust demand from US and China. Further lending support to the prices is falling stocks at LME coupled with expectation of tightness in the physical markets. Copper stocks at LME warehouses fell by 3525 tons today and are at the lowest level since October 2009 while cancelled warrants further rose to 20.78%, signaling strong physical demand. Support for February copper is seen at Rs.412 while resistance is seen at Rs.432.
Zinc:Zinc may note some decline tracking international markets.Stocks at LME fallen by 125 tons today. Also according to the International Lead and Zinc Study Group (ILZSG) the global zinc market was in surplus by 337,000 tons in the first 11 months of 2011. However sharp gains in copper prices may lend support to Zinc prices. Support for MCX Zinc January contract is seen at Rs.101 while Resistance is seen at Rs.105.
Lead:According to International Lead and Zinc Study Group (ILZSG) the global lead market was in surplus by 157,000 tons in the first 11 months of 2011. The downside may however be capped amid higher replacement demand in winter and higher cancelled warrants ratio at LME warehouses. Stocks at LME fell by 100 tons today. Support for MCX Lead January contract is seen at Rs.108 while resistance is seen at Rs.114.
Nickel:Nickel downside remains capped. Weighing on prices is slight retreat in copper prices, rebound in US Dollar and choppiness in equities. Also putting pressure is lower cancelled warrants ratio at LME. The downside may however be capped amid lower stocks at LME warehouses. Stocks rose by 120 tons today. Support for MCX Nickel January contract is seen at Rs.1010 while Resistance is seen at Rs.1,060.
Aluminum: LME warehouses however recent production cuts and jump in canceled warrants at LME may cap the downside. Stocks at LME fallen by 3525 tons today. Support for Aluminum January contract is seen at Rs.108 while resistance of Rs.114.
Prices will further track macro economic data and its impact on movement in global currency and equity markets. As for today, focus will be on Euro Zone Flash Manufacturing PMI and US Richmond Manufacturing Index.
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