By Paul Ploumis 07 Sep 2015 Last updated at 03:40:02 GMT
Market Outlook: Most of the metals closed on an absolute weak note on Friday as the previously released weak economic data from China and continued equity rout has further fueled the concerns over the global economic scenario. Moving ahead, China markets reopened today after a two-day holiday last week
Base Metals: Technical Recommendations:
| Exchange | Contract | S2 | S1 | PCP | R1 | R2 | Recommendation |
| Copper Comex | Dec-15 | 2.275 | 2.293 | 2.312 | 2.347 | 2.377 | Trading range 2.380-2.290 |
| Copper LME 3M | Fwd | 5021 | 5063 | 5109 | 5179 | 5242 | Trading range 5040-5190 |
| Copper MCX | Nov-15 | 343.1 | 345.2 | 347.50 | 350.8 | 353.8 | Trading range 354-345 |
| Lead LME 3M | Fwd | 1636 | 1650 | 1664 | 1691 | 1715 | Sell at 1687-1690 TP 1642 SL 1705 |
| Lead MCX | Sep-15 | 110.0 | 110.6 | 111.30 | 112.5 | 113.6 | Sell at 112.50-112.60 TP 110.60/110 SL 113.60 |
| Zinc LME 3M | Fwd | 1766 | 1776 | 1787 | 1802 | 1815 | Sell at 1804-1806 TP 1778/1770 SL 1820 |
| Zinc MCX | Sep-15 | 118.6 | 119.1 | 119.60 | 120.2 | 120.6 | Sell at 120.10-120.15 TP 118.60/118 SL 121.60 |
| Nickel LME 3M | M Fwd | 9680 | 9779 | 9890 | 9982 | 10065 | Sell at 9960-9970 TP 9680/9600 SL 10070 |
| Nickel MCX | Sep-15 | 651.4 | 656.4 | 662 | 665.9 | 669.5 | Sell at 666-668 TP 652/645 SL 680 |
| Aluminum LME 3M | Fwd | 1593 | 1601 | 1610 | 1624 | 1637 | Trading range 1590-1635 |
| Aluminium MCX | Sep-15 | 106.5 | 106.9 | 107.4 | 108.1 | 108.7 | Trading range 108.70-106.30 |
Market Outlook: Most of the metals closed on an absolute weak note on Friday as the previously released weak economic data from China and continued equity rout has further fueled the concerns over the global economic scenario. Moving ahead, China markets reopened today after a two-day holiday last week and ahead of a wave of economic readings that may fan concerns the world's No.2 economy is heading for a hard landing. Additionally, US markets would remain being closed today on account of Labor Day, which in turn would leave the market relatively calm. As per recent updates, China's annual contract prices in 2015 for copper-treatment and refining are up 16% from 2014 on ample supplies of ore from overseas, indicating bleak future of the red metal. Overall, with the US markets being closed and China to release important economic data tomorrow, we expect the base metals to trade within a limited range for the day. Therefore, we recommend selling Nickel, lead and zinc from higher levels whereas expect Copper and Aluminum to remain range bound for the day.
Aluminum: 3 Month forward LME:
• Aluminum 3M forward LME proved its sturdiness this week as the metal traded on the positive path for most part of the
week and settled at $1608 MT, up by around 0.31%.
• The inventories dropped by 38275 MT while the cancelled warrants declined by 37575 MT, giving a mixed cue to
negative for the metal. The contango for the metal rose from $15.25 MT to $20.25 MT, indicating the metal’s way to
recovery.
• With Chinese economic data due to be released tomorrow and US being closed for the day, we expect the metals market
to remain relatively calm for the day.
• Overall, we expect Aluminum to remain range bound for the day.
Copper- 3 Month forward LME:
• 3M LME Copper after being driven in the wagon of losses in the previous few weeks, made a comeback this week, settling
at $5120 MT, marginally down from its previous week’s close.
• The inventories at LME dropped by 10425 MT, while the cancelled warrants for the metal shot up by 9350 MT, giving a
positive cue for the metal. The backwardation for the metal shrivelled on Friday to $11.75 MT, giving a negative cue for
the metal.
• As per recent updates, China's annual contract prices in 2015 for copper-treatment and refining are up 16% from 2014
on ample supplies of ore from overseas, indicating bleak future of the red metal.
• Overall, we expect Copper to remain range bound for the day
Nickel- 3 Month forward LME:
• Nickel seems to be determined to test its limits as the metal continued to run with the downside momentum and settled
at $9950 MT, down by around 1.09% from its previous week’s close.
• The inventories for the metal by 1488 MT while the cancelled warrants dipped by 5970 MT, giving a mixed cue for the
metal. However, the contango for the metal remained steady at $26.75 MT, lowering the appeal to trade in for the
investors.
• As per recent updates, Indonesia reiterated its export ban on the Nickel ore while the production from Philippines
continues to flood the market with enough Nickel. This ban has supported Nickel, however we expect it to be short lived.
• Overall, we recommend selling Nickel from higher levels for the day.
Zinc and Lead: 3 Month forward LME:
• Last week, both lead and zinc were marred by the bearish sentiment in the marker led by the weak economic data from
China. LME 3M fwd Lead settled around $1665 MT, down by around 3.87% while Zinc settled at $1785 MT, down by near
1.35% from its previous week’s close.
• In case of lead, inventories at LME rose this week by 6025 MT while the cancelled warrants dipped by 4000 MT, pinning
the price for the metal on the downside. The contango for the metal at LME nearly doubled this week to $13.5 MT, giving
negative cues for the metal.
• While in case of zinc, the inventories at LME dropped by 7900 MT, while the cancelled warrants dipped by 7700 MT,
giving a mixed cue for the metal. While, the contango for the metal remained steady at $5.75 MT, giving mixed signs.
• Overall, we recommend selling both lead and zinc from higher levels for the day.
Courtesy : Karvy Commodities
