Thursday, 4 April 2013

Rupee and Asian Premiums Support Indian Metal

Asian premiums are improving that helped the prices of Copper recovering from the lows. The rise was witnessed in India after the news that Sterlite industries production got halted by emission worries. Supreme Court fined the company Rs 100 crores over five years for air pollution. Although apex court has set aside the order to shut down the plant by Madras High Court. Indian Copper and other metals moved higher aided by rising premiums and falling Rupee.
Meanwhile, port strike in Chile and problems in companies like Codelco and Anglo America relating to blockages supported high premiums. Grade A Copper premiums in Singapore were at $ 65 per tonne compared to $ 40 per tonne last Friday.
In London, situation remained different as the prices closed at eight month lows due to rise in inventories that have reached highs of 2003. The LME three month Copper prices closed at $ 7373 per tonne, down $ 63 per tonne. Inventories gained by 6850 tonnes to 579175 tonnes, rising 80% this year.
On economic front, news of rise in jobless claims numbers didn't went well with participants of metals. This week some grim data has already hit the markets. The US PMI numbers were on the downside followed by New orders index decline and US non manufacturing PMI decline. This was followed by yesterday's jobless claims numbers that increased by 28000 for the week ending 30 March 2013 to reach 385000. The four week moving average was 354250, up 11250 from previous week.
Dollar recovered against the Euro on hopes that Federal Reserve can continue its quantitative support to the economy. The Dollar was 1.2817, up 1.3% against the Euro. ECB left the interest rates unchanged at 0.75% while speculation was that the ECB could lower the rates to support ailing economy. Weak Rupee supported the metals in India. Rupee ended at 54.27 against the Dollar and is now trading at 54.80 indicating that Copper can go further up on MCX.
Indian Copper April expiry contract on MCX closed at Rs 409 per kg, up 1.4%. The prices tested a low of Rs 401.5 per kg before recovery chipped in. Among other metals, Zinc was the outperformer with gains of 2.2%, to settle at Rs 103.3 per kg. Short covering was the basic reason for the rise. Volumes picked sharply higher to 39195 kgs compared to 31084 kgs on 3 April 2013.
Source by Commodity Insights

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