basemetals intraday

Base Metals
15 May 2008 10:04:56



Major Economic Data:

The U.S. Labor Department said that the consumer price index was up .2% in April and up 3.9% from a year ago. Excluding food and energy costs, prices were up .1% in April and up 2.3% from a year ago.

The U.K.'s Office for National Statistics said that the unemployment rate for January to March remained at 5.2%, the same as three months ago. Also in January to March, 84,000 full-time jobs and 33,000 part-time jobs were added.

Industrial production in the Euro area 15 was down .2% in March after a gain of .3% in February.

Copper

Copper declined to a seven-week low on concern that a slowing global economy will curb demand for the metal used in pipes and wires. MCX Copper June traded mostly weak following international market.

Industrial-production growth inChina, the world's biggest copper buyer, slowed more than economists estimated last month, and imports of the metal dropped from a year earlier. The price of the metal has tripled in the past four years, partly because ofChina's booming economy.

A group representing contract workers at Codelco, the world's biggest copper producer, extended a fast for a third day, saying the government is failing to comply with an accord that ended a 20-day strike last week.

Copper stockpiles earmarked for withdrawal from warehouses registered with the London Metal Exchange jumped 44 percent to the highest in two weeks.

Metals output fromChina, the world's largest consumer, rose in April from a month ago as producers ramped up production to meet demand in the high-production season in spring. Output of alumina, a raw material, declined.

Copper output was the highest since November last year, aluminum the highest since December, lead a record high and zinc the highest this year, Bloomberg data shows.

Chinese shipments of steel, copper and other commodities were disrupted after the country's worst earthquake in 58 years closed the main railway in the country's central region.

MCX Copper June - Technical Outlook:

The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are rising from oversold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 9-day EMA. The downside closing price reversal on the daily chart is somewhat negative.

Market is expected to remain positive and the resistance is seen at 346.3 levels. If market breaches 346.3 may see prices to take further upside towards 349.2 and 352.0;however if it holds back below 340.5 may see prices to fall further on today. Major support is seen at 337.7 and 334.8

Recommendations-MCX Copper June: Buy at 341 Target 346 and 3349 Stop loss at 339.20



Nickel

MCX Nickel May traded weak following LME, market traded weak in a tight range of 1117-1147.

Nickel warehouse stock at LME, net change was -282 MT to 49452 MT

Global stainless steel output will rise 8 to 15 percent this year, according to the Bureau of International Recycling.

Production will increase to 30 million to 32 million metric tons, the BIR said in statement e-mailed today. The stainless steel market will have a ``more positive year'' than in 2007, when there was a drop in the price of nickel, a raw material used to make the alloy, the BIR said.

MCX Nickel May -Technical Outlook:

The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are rising from oversold level, which is bullish and should support higher prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.

Market is expected to remain positive and the resistance is seen at 1144.7 levels. If market breaches 1144.7 may see prices to take further upside towards 1160.8 and 1174.7;however if it holds back below 1114.7 may see prices to fall further on today. Major support is seen at 1100.8 and 1084.7

Recommendations:MCX Nickel May: Sell at 1120-23 Target 1095 and 1080 SL 1138



Zinc

Zinc warehouse stock at LME, net change was -375 MT to 124400 MT

Nyrstar NV, the world's largest zinc refiner, said China's strongest earthquake in more than half a century had no impact on its operations in the country.

Vedanta Resources Plc, India's largest zinc producer, may say fiscal second-half profit fell 14 percent on lower prices for the metal and as its share of profit from its Indian unit was eroded.

ILZSG Data:

Zinc consumption dropped in the first quarter, widening a surplus of the metal from a year earlier, according to the International Lead and Zinc Study Group.

Demand for the metal used to galvanize steel declined 0.4 percent to 2.767 million metric tons, the Lisbon-based group said today on its Web site. Zinc oversupply was 72,000 tons, up from 59,000 tons in the same period a year ago, it said.
from 59,000 tons in the same period a year ago, it said.

Declining prices for the metal because of the surplus in production are lowering costs for users such as ArcelorMittal, the world's largest steelmaker. Zinc has fallen 2 percent this year, extending a slump of 44 percent last year that made the raw material the biggest loser on the London Metal Exchange.

Demand fell 4 percent in the U.S., the second-largest user, to 262,000 tons. Germany, Italy and Japan, all among the top 10 consumers, also saw declining usage. China, the world's biggest purchaser, posted growth of 9.4 percent in the quarter.

Metal production totaled 2.839 million tons, compared with 2.837 million tons last year, ILZSG said.

MCX Zinc May -Technical Outlook:

The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are rising from oversold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 9-day EMA. The downside closing price reversal on the daily chart is somewhat negative.

Market is expected to remain positive and the resistance is seen at 98.8 levels. If market breaches 98.8 may see prices to take further upside towards 100.7 and 102.2;however if it holds back below 95.3 may see prices to fall further on today. Major support is seen at 93.8 and 91.9

Recommendations-MCX Zinc May: Buy at 96 Target 98 and 100 SL 94.80



Lead

MCX Lead traded mostly down; movement was volatile as market traded in a broad range of 93 –98.20

Lead warehouse stock at LME, net change was 825 MT to 61900 MT

ILZSG: The lead deficit shrank to 7,000 tons, from 38,000 tons. Metal production increased 1.2 percent to 1.986 million tons and consumption declined 0.4 percent to 1.993 million tons. Lead for delivery in three months has lost 12 percent this year, the most on the LME.


MCX Lead May -Technical outlook:

The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are rising from oversold level, which is bullish and should support higher prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.

Market is expected to remain negative and the support is seen at 93.6 If market breaches below 93.6 may see prices to take further correction towards 90.7 and 88.4;However if it holds back above 98.8 may see prices to rise further on today. Major resistance is seen at 101.1 and 104.0

Recommendations –MCX Lead May: Sell at 97 target 95 and 93.5 SL 98.20



Aluminium

MCX Aluminium traded strong towards high of 123.35 following LME and other metals, movement remained in tight range of 121.30 – 123.35

Aluminium warehouse stock at LME, net change was -1425 MT to 1032375 MT

Rio Tinto Group, the world's second-biggest aluminum producer, deepened output cuts at its New Zealand smelter to conserve dwindling hydroelectric reserves.

United Co. Rusal, the world's biggest aluminum producer, will spend $700 million to build and equip the Taishet Aluminum plant in Russia's Irkutsk region near China, the largest user of the metal.

Metals output from China, the world's largest consumer, rose in April from a month ago as producers ramped up production to meet demand in the high-production season in spring. Output of alumina, a raw material, declined.

Production of alumina, a raw material used in making aluminum, declined 9 percent from March. Some of China's major alumina producers, excluding Aluminum Corp. of China, cut output last month to prevent a decline in prices, according to an e- mailed report from Macquarie Group Ltd.

MCX Aluminium May -Technical outlook:

The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are rising from oversold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 9-day EMA. The downside closing price reversal on the daily chart is somewhat negative.

Market is expected to remain positive and the resistance is seen at 123.8 levels. If market breaches 123.8 may see prices to take further upside towards 124.6 and 125.9, however if it holds back below 121.8 may see prices to fall further on today. Major support is seen at 120.5 and 119.7

Recommendations–MCX Aluminium May: Buy at 122 Target 124 and 126 SL at 120.5

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