basemetals intraday

Base Metals: Metals gain as global stockpiles fall
09 June 2008 09:46:53



The U.S. Labor Department said that the unemployment rate shot up from 5.0% to 5.5% in May, the highest since October of 2004. Non-farm payrolls were down 49,000 in May, not as bas as expected.

Statistics Canada said that the unemployment rate remained at 6.1% in May with a net gain of 8,400 jobs, slightly less than expected. Over the past twelve months, there has been a net gain of 339,000 jobs.

The German government reported that industrial production was down .8% in April, weaker than expected.

Copper

Copper jumped the most in three weeks as the dollar weakened on a rise in U.S. unemployment, boosting demand for the metal as a store of value.

The U.S. Dollar Index, a gauge of six major currencies including the euro and yen, fell as much as 1 percent today after the Labor Department said the U.S. jobless rate climbed
the most in more than two decades last month. Copper has gained 19 percent this year as the dollar fell to record lows, boosting demand for commodities priced in the currency.

The metal also gained today as global stockpiles fell, helping to quell demand concerns, Barclays Capital analysts wrote in a report today. Inventories monitored by the London Metal Exchange dropped 950 metric tons, or 0.8 percent, to 122,550 tons, marking a 1.9 percent decline this week. Supplies tallied by the Shanghai Futures Exchange fell 13 percent to 38,829 tons this week.

Peruvian mine workers postponed a potential national strike to June 30 to give Congress time to vote on legislation on better pay and benefits.

Chilean trucking companies ended a three-day nationwide strike that sparked shortages of food and cut copper production, after the government agreed to cut their tax payments on diesel.

Shanghai copper stockpiles fell for a second week, dropping by 13 percent, Inventories, based on a survey of five warehouses monitored by the Shanghai Futures Exchange, declined by 5,725 metric tons to 38,829 tons this week, the exchange said.

MCX Copper June - Technical Outlook:
The daily stochastics have crossed over up which is a bullish indication. MACD is heading downwards in positive region, showing decrease in bullish momentum. The prices closed above short term and medium term EMA, which supports bears.

Technical have turned neutral to bullish and market is expected to remain positive above 346.1 levels. If sustain above this level can see a rally towards 349.2 and 354.1, If market sustains below 341.2 can see a further fall towards 338.1 and 333.2.

Recommendations-MCX Copper June: Buy at 342.50 Target 346 and 348 SL 340.10

Nickel
Nickel headed for its first weekly gain in six in London as power disruptions in Western Australia and declining stockpiles increased concern about adequate supply.

Nickel stockpiles tracked by the London Metal Exchange have fallen 7.7 percent since the end of April. Apache Corp., operator of an Australian natural-gas plant, said it may take two months to partially restore production after a June 3 explosion at a pipeline. Nickel producer Minara Resources Ltd. has operated at reduced capacity since then.

Higher nickel prices will bolster earnings for companies including OAO GMK Norilsk Nickel, the biggest producer of the metal used in stainless steel.

Nickel slumped 21 percent last year as inventories monitored by the LME expanded sixfold. Inventory fell 0.2 percent to 47,490 tons, at LME .

Apache stopped supplying gas from Varanus Island off Australia's northwest coast after a rupture in a pipeline triggered a fire, shutting off about a third of the state's supplies.

Minara, Australia's second-largest nickel producer, secured alternative supplies for its Murrin Murrin mine from Woodside Petroleum Ltd., a company spokesman said. Last month, the company forecast production of 34,000 tons to 38,000 tons this year.

Oxiana resumed full production at its Golden Grove zinc mine in Western Australia after sourcing alternative power, the Melbourne-based company said today. It had been using standby diesel power since June 3.

MCX Nickel June - Technical Outlook:
The daily stochastics have crossed over up which is a bullish indication. The prices closed above short term and medium term EMA, which supports bears. MACD is heading upwards in positive region, showing increase in bullish momentum.

Technical have turned neutral to bullish and market is expected to remain positive above 998 levels. If sustain above this level can see a rally towards 1037 and 1067, If market sustains below 967 can see a further fall towards 928 and 898.

Recommendations: MCX Nickel June: Buy at 955 Target 969 and 978 SL 948

Zinc
Hindustan Zinc Ltd., India's largest producer of the metal, lowered prices for the third time in eight days to match global rates.

The price of zinc was cut by 5,000 rupees, or 5 percent, to 92,700 rupees ($2,160) a metric ton; Lead prices were kept unchanged at 96,700 rupees a ton.

Shanghai copper stockpiles fell for a second week, dropping by 13 percent; SHFE Zinc stockpiles dropped 408 tons to 68,250 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 prices closed below short term and medium term EMA, which supports bears. MACD is heading downwards in positive region, showing decrease in bullish momentum.

Technical are neutral to bearish signalling sideways to lower prices in the near term. Initial support for the market is around 83.6 level. If broken can see further fall to 82.7 and 81.6, If market holds above 84.7 further rally can be seen towards 85.6 and 86.7.

Recommendations- MCX Zinc June: Sell at 85.20 Target 83.8 and 82.5 SL 86.80

Lead
Hindustan Zinc Ltd., India's largest producer of the metal, lowered prices for the third time in eight days to match global rates. The price of zinc was cut by 5,000 rupees, or 5 percent, to 92,700 rupees ($2,160) a metric ton; Lead prices were kept unchanged at 96,700 rupees a ton.

Inventory at LME increased by 975MT on Friday.

MCX Lead June -Technical outlook:

The daily stochastics have crossed over down which is a bearish indication. The prices closed below short term and medium term EMA, which supports bears. MACD is heading downwards in positive region, showing decrease in bullish momentum.

Technical are neutral to bearish signalling sideways to lower prices in the near term. Initial support for the market is around 83.4 level. if broken can see further fall to 82.3 and 81.3 , If market holds above 84.4 further rally can be seen towards 85.5 and 86.5

Recommendations –MCX Lead June: Sell at 85.20 Target 83.8 and 82.5 SL 86.80

Aluminium
Shanghai copper stockpiles fell for a second week, dropping by 13 percent, Stockpiles of aluminium slipped 1.1 percent, or 2,061 tons, to 187,720 tons, based on a survey of 11 warehouses in Shanghai.

United Co. Rusal, the world's largest aluminium producer, plans to spend $300 million on building a shipping facility on the Gulf of Finland.

MCX Aluminium June -Technical outlook:
The daily stochastics have crossed over up which is a bullish indication. The prices closed above short term and medium term EMA, which supports bears. MACD is heading upwards in positive region, showing increase in bullish momentum.

Technical have turned neutral to bullish and market is expected to remain positive above 127.2 levels. If sustain above this level can see a rally towards 128.3 and 130.3, If market sustains below 125.2 can see a further fall towards 124.1 and 122.1

Recommendations–MCX Aluminium June: Buy at 125.5 Target 127 and 128 SL 124.60

MCXARUN
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