Surging dollar to pull down metal prices further
A surging dollar coupled with a dull season in the forthcoming June-September quarter would see further correction in metal prices, say analysts.
By Deepa Krishnan, TNN |
MUMBAI: A surging dollar coupled with a dull season in the forthcoming June-September quarter would see further correction in metal prices, say analysts.
According to traders, June-August is traditionally considered as a dull season and physical demand remains low. Despite labour disputes in scattered South American mines, impact on production is expected to remain negligible, they said. Metals including zinc, nickel, lead, copper and aluminium have dropped on the futures exchange both domestically and internationally over the last week.
On London Metal Exchange (LME), zinc had dropped to levels last seen in 2006, as did nickel futures. Lead price also slumped with stockpiles increasing, indicating oversupply.
The three-month copper contract on the LME had recovered after testing $7,863 levels. Technical factors indicate that prices would correct further and consolidate at 7,800 in the short-term. Meanwhile, the domestic futures June copper contract on the Multi Commodity Exchange is expected to consolidate at Rs 331 levels.
In the last week, at MCX, zinc fell to Rs 83 per kg levels in May contract falling close to 8%, and is expected to correct further to test Rs 80 a kg. Lead and nickel shed about 7% each in the July and May contracts respectively. Lead is trading around Rs 84 levels, while nickel is Rs 940 per kg levels.
Inventories of zinc monitored by the LME had risen 5.8% to a 20-month high. Lead inventory climbed 2.4% to the highest since September, 2007 supporting the price decline.
On the supply side, a report from MAPE Admisi Commodity Research said a strike by Chilean dock-workers has a shipment of copper stuck off the coast of the Pacific town. In Peru, miners are looking to strike from mid-June on labour issues. However, these would not affect the prices.
According to traders, June-August is traditionally considered as a dull season and physical demand remains low. Despite labour disputes in scattered South American mines, impact on production is expected to remain negligible, they said. Metals including zinc, nickel, lead, copper and aluminium have dropped on the futures exchange both domestically and internationally over the last week.
On London Metal Exchange (LME), zinc had dropped to levels last seen in 2006, as did nickel futures. Lead price also slumped with stockpiles increasing, indicating oversupply.
The three-month copper contract on the LME had recovered after testing $7,863 levels. Technical factors indicate that prices would correct further and consolidate at 7,800 in the short-term. Meanwhile, the domestic futures June copper contract on the Multi Commodity Exchange is expected to consolidate at Rs 331 levels.
In the last week, at MCX, zinc fell to Rs 83 per kg levels in May contract falling close to 8%, and is expected to correct further to test Rs 80 a kg. Lead and nickel shed about 7% each in the July and May contracts respectively. Lead is trading around Rs 84 levels, while nickel is Rs 940 per kg levels.
Inventories of zinc monitored by the LME had risen 5.8% to a 20-month high. Lead inventory climbed 2.4% to the highest since September, 2007 supporting the price decline.
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On the supply side, a report from MAPE Admisi Commodity Research said a strike by Chilean dock-workers has a shipment of copper stuck off the coast of the Pacific town. In Peru, miners are looking to strike from mid-June on labour issues. However, these would not affect the prices.
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