• Base metals are likely to trade under pressure due to the escalation of trade wars, while volumes are going to be thin in absence of Chinese players as Chinese markets are observing holiday today.
• Copper lost it steam on Friday to clock the biggest weekly loss since April, as Whitehouse warned of another import duty of Chinese goods worth $50 billion.
• Three-month copper on the London Metal Exchange closed down 2.2 percent at $7,020 a tonne, having hit a near two week low of $6,996. The industrial metal has slipped from a 4-1/2 year high hit last week on supply concerns.
• Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 1.2 percent from last Friday.
• Three-month zinc futures finished 3.4% lower at $3080 on Friday, while lead ended down 2 percent at $2,405
• LME zinc and lead stocks have both fallen since this time last year – zinc inventories are down 25% at 245,650 tons while those of lead is down 26% at 133,475 tonnes. Still, zinc stocks are up 26% since the start of 2018, while lead stocks are down 6%.
• Iran restricted exports of zinc and lead ingot lead to rising of lead premiums in India to a 10-month high, interest in overseas ingots, bullions Premiums for secondary lead shipped to India continued to pick up this week while buyers sought material to plug the gap arising from Iranian export restrictions.
• Nickel ended 0.7 percent lower at $15,185.ton on Friday,
• Environmental checks in China are also reducing the output of nickel pig iron, a low-grade alternative to refined metal
• Aluminum ended 1.1 percent down at $2,275.
• Aluminum ended down 2.3 percent at $2,204, having hit its lowest since late April
The growth story is running into problems with recent weak data from the U.S., Europe and China, a strengthening dollar and weakening emerging market currencies were raising concerns about growth going forward. Results from China’s macroeconomic data, including a lower than expected rise in fixed asset investment, has put pressure on the base metals complex. President Donald Trump, raising import tariffs to 25% on 1,100 different aerospace, robotics and auto-industry goods, has shaken up the base metals complex last week. We remain mildly bullish, but the market may not see follow-through buying until stronger economic data is seen. While the positive sets of economic numbers from The US raises investor’s confidence about a strong underlying economy.
Copper on MCX could face headwinds at Rs.490/kg area while price to gain support at Rs.470
Aluminum would find it tough to climb above Rs 160/kg test and could trade lower to 152 levels.
Zinc could face headwinds at Rs.217 while price to gain supports at Rs.210 area
Lead could find support at 160 While rally to face headwind around Rs.170 area.
Nickel is likely to remain range bound with downward bias. Support remain at Rs 1015/kg while resistance at RS 1050 kg