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Monthly report on Base Metals for October 2015

SMC Research | 09 Oct, 2015  | Follow Author | Add to my Favourites 
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Overview and outlook

Copper moved in narrow range of 329.75-368 in Sep 2015 on mixed fundamentals as China slowdown concerns kept the prices under pressure while supply disruptions supported the prices higher. Last month an earthquake hit Chile, the world's biggest supplier of this industrial metal. The earthquake pushed copper to a near two-month high as miners closed operations in Chile, Chile's state-owned Codelco, the world's biggest copper mining company, stated that it had halted operations at one of its mines. Magnitude 8.3 earthquakes hit off the coast of Chile, shaking buildings in the capital city of Santiago and generating a tsunami warning for Chile and Peru, the world's top two suppliers of copper. Codelco halted open-pit operations at its large Andina mine and evacuated workers at its smaller Las Ventanas refining and smelting division, while Antofagasta said it had temporarily closed its flagship Los Pelambres mine, and would wait until daybreak to assess the damage. Copper prices drew strength from China's decision to halve the tax charged on purchases of vehicles with small engines. The move is expected to boost demand for copper, which is widely used in automotive production.

Looking ahead, copper prices may remain on volatile path as its prices can trade in range of 320-370 in near term.

In the month of Oct 2015 copper prices may remain on volatile path. However some short covering at lower levels can be seen. Movement of various economic indicators such as PMI data, home sales, employment data and Chinese demand will give further direction to the copper prices.


Overview and outlook

Nickel prices ended the month of September on positive note due to increase in stainless steel demand and lower level buying. It moved in range of 633.50-699.50. Nickel producers face a unique dilemma with many reluctant to put their stock on the market due in part to both near-historic low prices and an oversupply in the market. However, the supply is expected to decrease this year and while this is a positive sign, it is offset by an overflow with demand down sharply in Q3.

Nickel prices can move in range of 610-780 in the month of October 2015.

In the month of Oct 2015 Nickel prices to remain under pressure but short covering at lower levels cannot be denied .Overall lack of demand from steel sector and increasing inventories have kept price unde r pressure .

Movement of local currency is likely to influence its prices on domestic bourses.

Lead and Zinc

Overview and outlook


Lead prices continued it bear run in the month of September as slowdown concerns in China stock markets and firm greenback capped the upside while battery demand supported the prices. Overall its prices moved in range of 107.65-116.20 in MCX. Fear of rise in interest rate in US continue to keep the upside capped but some lower level buying can give support to the prices amid China monetary easing measures. It can move in range of 101 120 in MCX.


Overview and outlook

Zinc counter dropped lower in the month of September on selling pressure amid China growth concerns and rising greenback. Zinc moved in range of 105.20-122.70.

Overall it can move in range of in the month of 102-125 in October 2015.

In Oct 2015, Zinc and Lead prices can remai n on vol ati l e path ami d Chi na slowdown concerns. Its prices will depend upon automobile , const ructionand infrastructure demand. Moreover situation of cancelled warrants along with stock position will impact the prices.


Overview and outlook

Beari sh pressure ami d Chi na stock market meltdown and other base metals kept the prices of output grew by 10.3 percent in the first half of this year, the fastest rate of growth since 2010, when many smelters were reactivating capacity idled during the depths of the global financial crisis. Meanwhile Aluminum can hover in range of white metal under pressure. Aluminum prices in the 97-113 month of October 2015. moved in range of 101.15-109.75. Global aluminum

In Oct 2015 aluminum prices are expected to trade on volatile path in near term. Demand from auto and construction sector along with shortage of bauxite can give support to the prices.



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About SMC Research
SMC Research, founded in 1990, is India’s leading share and stock broker, provides a wide range of financial services and investment solutions. A blend of extensive experience, diverse talent and client focus has made us the 4th largest broking house in India(Source: Dun and Bradstreet, 2008). Over the years, SMC has expanded its operations domestically as well as internationally. Existing network includes regional offices at Mumbai, Kolkata, Chennai, Cochin, Ahmedabad, Jaipur, Hyderabad, Bangalore plus a growing network of 2100+ offices spread across 425 cities/towns in India.

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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor accept any liability whatsoever arising from the use of any of the above contents.

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