basemetals intraday

Basemetals
02 June 2008 10:00:40



Base Metals June 02, 2008

Major Economic Data:

Australia's Bureau of Statistics said that retail sales were down .2% in April, weaker than expected.


The U.S. Commerce Department said that personal incomes were up .2% in April while consumer spending was also up .2%, as expected. In March, personal incomes were revised up from .3% to .4%. In the same report, the core rate of personal consumption expenditures, an inflation gauge, was up just .1% in April and up 2.1% from a year ago.


The University of Michigan's index of consumer sentiment fell from 62.6 to 59.8 in May, the lowest in 28 years, but also up slightly from the estimate earlier this month.The Chicago purchasing managers' index increased from 48.3 to 49.1 in May, better than expected.


Statistics Canada said that real GDP was down .1% in the first quarter, but up 1.7% from a year ago, weaker than expected. It was the weakest performance in over four years.


Eurostat said that the unemployment rate for the Euro area 15 remained at 7.1% in April. They also estimated that consumer prices were up 3.6% in May from a year ago, up from a 3.3% gain in April.


Japan's Statistics Bureau said that consumer prices were down .1% in April, but up .8% from a year ago. The unemployment rate increased from 3.8% to 4.0% in April and household spending fell 2.7% in April from a year ago.


Real GDP in India was up 8.8% in the first quarter from a year ago, the same as in the fourth quarter of 2007.

Copper

Copper traded little changed in Asia after falling below $8,000 a metric ton last week as investors
awaited U.S. economic data to gauge demand in the world's second- largest consumer of the metal used in wires and pipes.

Global stockpiles of copper increased by 13.1 percent last month, adding to concerns that use may be declining. A report today may show U.S. manufacturing contracted for a fourth month,
while a report on June 6 will probably show U.S. companies trimmed workers in the longest streak since 2003.

Copper stockpiles in warehouses monitored by the London Metal Exchange stood at 124,950 tons on May 30, according to exchange data. Inventories in Shanghai have risen 74 percent so
far this year to 44,554 tons as of May 29, according to the Shanghai Futures Exchange.

Zambia resumed talks with mining companies about a new tax structure that came into effect on
April 1, the country's Daily Mail reported, citing Mines Minister Kalombo Mwansa. The government decided to engage the mining companies because of concern among some investors about how the tax would be calculated, the Lusaka-based paper said.

Mexico's copper production fell 24 percent in March from a year earlier because of a strike at the
Cananea mine, according to the National Statistics Agency. Production fell to 28,250 metric tons, the statistics agency said today in a statement on its Web site. A strike by some workers at Cananea, owned by Grupo Mexico SAB, the nation's largest mining company, has halted most production since last year.

Hedge-fund managers and other large speculators decreased their net-long position in New York copper futures in the week ended May 27, according to U.S. Commodity Futures Trading Commission data. Speculative long positions, or bets prices will rise, outnumbered short positions by 3,661 contracts on the Comex division of the New York Mercantile Exchange, the
Washington-based commission said in its Commitments of Traders report. Net-long positions fell by 1,379 contracts, or 27 percent, from a week earlier.

Shanghai copper stockpiles declined 2percent this week, the Shanghai Futures Exchange said in a report today on its Web site. Inventories, based on a survey of five warehouses monitored
by the Shanghai Futures Exchange, decreased by 1,032 metric tons to 44,554 tons this week.

MCX Copper June - Technical Outlook:


The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower 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 333.6 If market breaches below 333.6 may see prices to take further correction towards 330.7 and 328.4 However if it holds back above 338.9 may see prices to rise further on today. Major resistance is seen at 341.2 and 344.1

Recommendations-MCX Copper June: Sell at 338 Target 332 and 327 SL 341.20


Nickel

Nickel is poised to rebound from almost a two-year low starting in the third quarter as rising
energy costs threaten supply, shifting the market into a shortfall this year, Merrill Lynch & Co said.

Demand will exceed supply by 17,000 metric tons this year, compared with a surplus in the first three months, the investment bank's analysts, including London-based Daniel Hynes, said today
in a report. The metal will average $30,000 a ton in the third quarter, up 5.2 percent from $28,500 a ton estimated in the current quarter.


MCX Nickel June - Technical Outlook:

The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower 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 913 If market breaches below 913 may see prices to take further correction towards 890 and 852 However if it holds back above 974 may see prices to rise further on today. Major resistance is seen at 1012 and 1035


Recommendations: MCX Nickel June: Sell at 940 Target 925 and 915 SL 962

Zinc

Zinc slumped by the exchange-imposed daily limit to a record low in Shanghai on speculation demand may be slowing as global inventories climbed to a 20-month high.

Stockpiles of zinc in London Metal Exchange warehouses rose 11.6 percent this week to 143,625 metric tons today, the biggest weekly gain in almost seven months and the highest level since
September 2006. Zinc inventories in Shanghai fell 472 tons to 68,658 tons this week, still 70 percent above a year ago.

Hindustan Zinc Ltd., India's largest producer of the metal, lowered prices of both zinc and lead for the second time in a week to match global rates. The price of zinc was cut by 2,200 rupees, or 2.2 percent, to 97,700 rupees ($2,314) a metric ton from May 31.

Zinc stockpiles dropped 472 tons to 68,658 tons, based on a survey of seven warehouses in Shanghai.

MCX Zinc June - Technical Outlook:

The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower 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 83.3 If market breaches below 83.3 may see prices to take further correction towards 81.1 and 80.0 However if it holds back above 86.6 may see prices to rise further on today. Major resistance is seen at 87.7 and 89.9


Recommendations- MCX Zinc June: Sell at 86 Target 84 and 82 SL 87.20

Lead

Hindustan Zinc Ltd., India's largest producer of the metal, lowered prices of both zinc and lead for the second time in a week to match global rates

Lead prices were reduced by 1,700 rupees, or 1.7 percent, to 96,700 rupees a ton.

MCX Lead June -Technical outlook:

The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower 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 81.8 If market breaches below 81.8 may see prices to take further correction towards 79.4 and 78.0 However if it holds back above 85.7 may see prices to rise further on today. Major resistance is seen at 87.1 and 89.5


Recommendations –MCX Lead June: Sell at 84.80 Target 83 and 81 SL 85.50

Aluminium

Stockpiles of aluminum increased 3,864 tons, or 2 percent, to 189,781 tons, based on a survey of 11 warehouses in Shanghai, Guangdong, Wuxi and Hangzhou, the exchange said.

Dubai Aluminium Co., the United Arab Emirates aluminum producer building the world's largest smelter in Abu Dhabi, plans to produce 2.5 million metric tons a year of the light metal by 2015 to meet growing global demand. Dubal, as the company is also known, will raise aluminum
output to more than 1 million tons a year in 2008 after completing an expansion.

MCX Aluminium June -Technical outlook:

The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower 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 121.1 If market breaches below 121.1 may see prices to take further correction towards 118.9 and 117.6 However if it holds back above 124.7 may see prices to rise further on today. Major resistance is seen at 126.0 and 128.2

Recommendations–MCX Aluminium June: Sell at 123.80 Target 122 and 120 SL 124.60

MCXARUN
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