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One may expect industrial metals to trade low today on account of weak Chinese manufacturing data.

20 Sep 2012

AHMEDABAD(Commodity Online): November Copper on India's MCX slides to Rs.452.65 , a loss of 1.11% at 11.59 am taking cues from China's PMI data.

“This morning, reports came in suggesting manufacturing activity in China stabilising for the month of September after hitting a nine-month low in August. Meanwhile, output dipped to its lowest level in 10 months, a survey of factory managers said on Thursday.” said Amrita Mashar, Manager-Research, Commodity Online.

All base metal plunged along with Copper.

“Intraday support for Copper seems to be at 449 and resistance at 458. Sell on rise can be suggested for this base Metal with SL of 458.” she said.

One may expect industrial metals to trade low today on account of weak Chinese manufacturing data. Nickel too has slipped by more than 1 percent in opening first hour to Rs 451.20 per kilogram.

“Yesterday, industrial metals prices edged higher supported by a surprise decision from the Bank of Japan (BOJ) to further ease its monetary policy. For Thursday, Nickel trading range is 945-962. Euro zone manufacturing data later this week will offer more clues for this metal. Support for contract seen at 445 and Resitance at 460.” Amrita added.

The global nickel market was in supply surplus by 26,000 tonnes in the first seven months of 2012, the latest monthly bulletin from Lisbon-based International Nickel Study Group (INSG) showed.

Amrita's take on LME Aluminium: ALUMINIUM LME 3-M SELL 2100 SL 2120 TGT 2080-2060 

China stimulus

Meanwhile, with the HSBC PMI for China down at 47.8 (a figure below 50 is a sign of contraction) investors are expecting further stimulus measures from China.

China also intends to increase investment in the power sector. So a downside to copper consumption could be offset by a rebound in power sector demand, the single most important end-use sector for copper accounting for 45-50% of Chinese demand, a Barclays report sent to Commodity Online said.

As a part of massive infrastructure capacity building, China would also construct 36 million housing units by the time it is 2015.

Meanwhile, India's Power Grid Corporation may invest close to $18 billion to upgrade networks and avoid recurring of the great black out that occurred recently. The news may be received with cheers by the copper industry even as further details are yet to emerge.

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20 Sep 2012
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