The base metals complex delivered a good performance on the LME last week. Prices were driven by favorable economic data from the US and the Euro Zone released in the last week.
But, prices also took cues from developments on the crisis in Egypt. This led to major concern in the global financial markets and sharp gains further were capped on the back of these worries. The US Dollar Index (DX) closed on a flat note in the last week.
Zinc was the top performer in the last week, as the metal rallied, gaining more than 7 percent on the LME. Prices touched a high of $2515/tonne and closed at $2495.50/tonne on the LME on Friday.
Rise in prices was mainly driven by supply concerns. An accident that had occurred earlier last week at Lisheen lead-zinc mine in central Ireland made Anglo to suspend its operations.
The mine is subjected to a full investigation after this incident. Lisheen is one of Europe’s biggest zinc mines producing around 175,000 tonnes per year of contained zinc and 20,000 tonnes per year on contained lead.
Zinc prices also took cues from positive economic data on Friday as prices gained almost 1 percent in a single-day movement.
During the week, LME zinc inventories did not show sharp movement as it declined only by 850 tonnes to 710,075 tonnes. On the MCX, zinc prices surged around 6.6 percent last week and hit a high of `114.40/kg.
In this case too, prices didn’t rise in tandem with movement in the international markets as appreciation in the Rupee spoiled the show.
Copper prices on the LME touched an all-time high of $10,100/tonne on Friday. The red metal prices rallied more than 5 percent on the LME last week and closed above the psychological level of $10,000/tonne on Friday.
Factors that influenced copper prices - positive economic data from the US and Euro Zone released in the last week, falling LME inventories and supply tightness in the copper market.
Copper inventories declined around 1 percent w-o-w on the LME warehouse to reach 394,150 tonnes on Friday. On the MCX, copper prices gained almost 5 percent and touched a high of `465.30/kg in the last week.
Cyclone Yasi forced Australia’s Mt Isa copper refinery to shut as it began pounding the northeast coast on Wednesday.
The Mt Isa copper mining and smelting unit was set to start operations by the weekend, but it was still unable to say when its 300,000-tonnes-a-year Townsville copper refinery, which is being checked for damage, would restart.
Outlook
Base metal prices are expected to trade in the positive territory today, mainly taking cues from the favorable employment data from the US last week. But, sharp upside in prices may not be witnessed as the US dollar is expected to remain strong today.
Copper prices may witness some profit- booking at higher levels. Gains in nickel prices are expected to be capped mainly on account of easing supply concerns from Yabulu in Australia.
Source: http://www.commodityonline.com
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