Base Metals

Copper rose in MCX and Shanghai as investors speculated that demand would continue to rise in China, the world's largest user of the industrial metal.

Refined copper imports gained 56 percent in November from a year earlier, the Beijing-based customs office said Dec 24. Shanghai copper may end the year little changed, after five years of gains, on concerns that an economic slowdown in the U.S. following a housing slump will spread to the rest of the world.

China will abolish import duties on copper cathode and anode, as well as alumina from Jan. 1, the Ministry of Finance said Wednesday. Import duties on copper cathode and anode are now at 2%, while that on alumina is at 3%.The government hopes that by curbing exports, reduced domestic production will help save energy and protect the resources of the world's biggest metal consumer.

Refined copper imports from Chile are exempt from duties, based on a free trade agreement between the two countries, which took effect Oct. 1, 2006.

China's alumina output in January-November jumped 49% on year to 17.77 million metric tons, but the country's biggest alumina and aluminum producer Aluminum Corp. of China Ltd. still raised its spot alumina prices to CNY4,200/ton earlier this month, citing tight supply.

The expanding output capacity of the world's biggest alumina producer already caused both domestic and international bauxite prices to surge. Bauxite is the ore used to make alumina, which is in turn used to make aluminum.


MCX Copper Feb (Daily Chart)

Technical Outlook:

Momentum studies have turned bullish; will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are increasing from over sold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 18-day EMA. The downside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Copper Feb: Buy at 274-275 for the target of 282 and 284 with stop loss at 270.50

MCX Zinc Jan (Daily Chart)

Technical Outlook:

Momentum studies have turned bullish; will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are increasing from over sold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 18-day EMA. The downside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Zinc Jan: Buy at 96.00-95.50 for the target of 98.00 and 99.20 with stop loss at 94.40


Technical Outlook:

Momentum studies have turned bullish; will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are increasing from over sold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 18-day EMA. The downside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Nickel Jan: Buy at 1050-1045 for the target of 1080 and 1110 with stop loss 1035

MCX Lead Dec (Daily Chart)

Technical Outlook:

Momentum studies have turned bullish; will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are increasing from over sold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 18-day EMA. The downside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Lead Jan: Buy at 105 –104.50 for the target of 107 and 108.80 with stop loss at 103.40

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