Broking firm Kotak Commodity Services gave following outlook on base metals segments:
Copper- MCX Copper may note some gains tracking rebound in international markets and weakness in Indian Rupee against US Dollar. LME Copper trades higher after noting sharp decline yesterday. Lending support to the prices is better than expected GDP and Housing data from US. Also lending support to the prices is hopes of robust demand from China. The gains may however be capped as talks to avert fiscal crisis in US stalled. Also putting pressure on the prices is firmness in US dollar, weakness in Asian equities and rising stocks at exchange warehouses. Stocks at LME rose by 7,025 tons yesterday and were at their highest level since February. Prices will further track economic releases and its impact on global currency and equity markets. As for today, focus will be on US Durable Goods, Personal Spending and Income and University of Michigan Consumer Sentiment. Support for February copper is seen at Rs.430 while Resistance is seen at Rs. 440.
Aluminum- MCX Aluminum may open higher tracking modest gains in international exchange however the upside remains caped. Putting pressure on the prices is record high stocks at LME warehouses coupled with rise in global production. Stocks at LME fell by 3,750 tons yesterday after hitting record high of 52,40,725 tons on Wednesday. Meanwhile according to International Aluminium Institute (IAI), daily production worldwide rose to 67,600 tons in November from 67,400 tons in October, for the second month in a row. Support for Aluminum December contract is seen at Rs.110.5 while resistance of Rs.113.5.
Zinc- MCX Zinc may open higher tracking range bound movement in international exchange and weakness in Indian Rupee. LME Zinc trades lower tracking higher stocks at exchange warehouses coupled with excess supply in physical markets however higher cancel warrants at LME warehouses may cap the upside. Stocks at LME fell by 1,525 tons yesterday but were hovering near 17 year high of 12,35,975 tons hit on December 6 while cancel warrants stood at 50.6%. Meanwhile according to the latest monthly bulletin of International Lead and Zinc Study Group (ILZSG), the global zinc market was in surplus by 157,000 tons in the first ten months of the year. Support for MCX Zinc December contract is seen at Rs.110.5 while resistance is seen at Rs.113.5.
Nickel- MCX Nickel may note some decline tracking international exchange however weakness in Indian Rupee may cap the downside. Weighing on prices is higher stocks at LME warehouses coupled with higher surplus in physical markets. Stocks rose by 42 tons yesterday. Meanwhile according to the latest monthly bulletin from Lisbon-based International Nickel Study Group (INSG), the global nickel market was in surplus by 55,600 tons in the first ten months of 2012. The downside may however remain capped tracking revised estimates of lower supply overhang in physical market next year. Support for MCX Nickel December contract is seen at Rs. 940 while resistance is seen at Rs. 975.
Lead- MCX Lead may note some gains tracking range bound movement in international market and weakness in Indian Rupee. Prices may seek support from hopes of robust winter related demand, recent decline in stocks at LME coupled with higher cancel warrants ratio. Stocks at LME fell by 2,250 tons yesterday after declining by 10,000 tons last week while cancel warrants stood near 43%.The gains may however be capped tracking supply glut in physical market. According to the latest monthly bulletin of International Lead and Zinc Study Group (ILZSG), the global lead market was in surplus by 67,000 tons in the first 10 months of the year. Support for MCX Lead December contract is seen at Rs.125 while resistance is seen at Rs.128.5.
Data and Events due today
> German GFK Consumer Confidence
> UK Gross Domestic Product
> US Durable Goods
> US Personal Income
> US Personal Spending
> US University of Michigan Consumer Confidence