Why China Decreased Orders in Copper

Barring copper base metals 3-M forwards at the LME closed marginally lower in spite of positive Non-manufacturing PMI data from the U.S. Copper closed marginally up by 0.17% while rest of the metals ended the trading session lower in the range of 0.08% to 0.2%. In the Indian markets the industrial metals closed marginally higher in the range of 0.2% to 0.7%. While aluminum remained mostly unchanged.

During the early morning session, base metals are trading mixed at the LME platform on the back of slight negative cues from the Asian equities. Coming to the commodity-specific updates, we maintain our moderately bearish view on nickel due to higher inventory data which made another new high of 239958 MT. Though the cancelled warrants for the commodity has increased by more than 5% yesterday on a net to net basis there has been addition of inventories. We have a sell view on copper as 86% of electric wire and cable producers in china are expecting the orders to decrease during the 4th quarter according to industry sources which may have a slight negative impact on copper in the near term. We have a ranged view with a bias on lead and zinc. However regarding zinc most of the existing mines are heading towards closure which we believe should be appositive trigger for the commodity over the medium term. We recommend selling from the higher levels in the select base metals like copper and nickel for the day.

COMMODITY INTRADAY TIPS

SELL LEAD MCX NOV NEAR 134 SL 135 TGT 133

SELL GOLD MCX DEC BELOW 29713 SL 29760 TGT 29640

 ECONOMIC INDICATORS:

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