basemetals intraday

Major Economic Data:

§ The U.S. Commerce Department said again that real GDP in the fourth quarter was up an annual rate of .6%, the same as its estimate one month ago. For all of 2007, real GDP was up 2.2%. The December eurodollars are steady.

§ The U.S. Labor Department said that jobless claims were down 9,000 last week to 366,000.

Major Headline:

§ Copper jumped the most in three weeks as inventories slumped to a seven-month low, raising concern that supplies may trail demand this year.

§ Copper production fell 42,000 metric tons short of demand last year, the International Copper Study Group said. The deficit compares with a surplus of 287,000 tons in 2006,

§ UBS boosted its 2008 copper forecast by 17 percent today, citing output constraints. The metal will average $3.50 a pound this year, the Zurich-based investment bank said. That compares with a previous forecast of $3. Before today, copper has averaged $3.5062 this year on the Comex.

§ Copper demand will outpace production by 100,000 metric tons this year, UBS said. Risks to output in Zambia, China and Chile, the world's biggest source of the metal, ``have increased in the past several months,'' Brebner said. In February, snowy weather and power outages disrupted copper production in China. In Chile, contract workers at state- owned Codelco, the world's biggest copper producer, plan to strike, a labor leader said last week, threatening production.

§ Zambia's trade surplus widened to 168 billion kwacha ($45.8 million) in February on increased exports of copper from the southern African country, the Central Statistics Agency said.

§ The surplus rose from a revised 42.1 billion kwacha in January, Modesto Banda, acting director of the agency, said in a statement in the capital, Lusaka, today.

§ Copper accounts for about 70 percent of Zambia's export earnings and production has risen in recent years as the government sold the industry back to investors, after taking it over from Anglo American Plc in the early 1970s.

§ Exports rose 8.3 percent to 1.3 trillion kwacha in February from a month earlier, while imports fell 23 percent to 1.1 trillion kwacha, the statistics office said. Refined copper accounted for 81.8 percent of exports in February, compared with 81.7 percent in January

§ Nickel advanced for a third day in London on speculation demand from China, the world's largest user, will expand because of rising production of stainless steel. Copper and tin also gained.

§ Chinese stainless steelmakers will probably boost output by 23 percent this year to 9.1 million metric tons because of strong domestic demand and plant expansion, Macquarie Group Ltd.'s analyst Bonnie Liu said. About 70 percent of world nickel production is used in stainless steel.

§ Recovery in stainless steel demand and increases in coking- coal prices will boost nickel, Liu said today at a conference in Hong Kong. Growth in Chinese nickel imports are a ``natural result,'' she said.

MCX Copper April (Daily Chart)



Technical Outlook: Momentum studies are bullish but are now at overbought levels and 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 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.

Recommendations -MCX Copper April: Buy at 338 Target 349 and 356 Stop loss 332


MCX Zinc March (Daily Chart)



Technical Outlook: Momentum studies are bullish but are now at overbought levels and 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 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.

Recommendations -MCX Zinc March: Buy at 94.50 Target 97 and 98.80 Stop loss at 93.15



MCX Nickel March (Daily Chart)



Technical Outlook: Momentum studies are bullish but are now at overbought levels and 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 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.

Recommendations:MCX Nickel March: Buy at 1225 Target 1280 and 1295 Stop loss at 1205



MCX Lead Feb (Daily Chart)



Technical Outlook: Momentum studies are bullish but are now at overbought levels and 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 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.

Recommendations: MCX Lead March: Buy at 115.50 Target 117 and 119 Stop loss at 114.20

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