Base metals remained flat on Friday after bickering between losses and gains as the news that Greece clinched an agreement on economic reforms but was stuck to secure a second bailout fund from EU/IMF amidst the euro zone finance ministers demand for more steps and a parliamentary seal of approval before providing the aid hampering the metals. Markets even shrugged off the bleak Chinese trade data released during the day.
LME Copper buyoed by 1.4% at $8666.25 per tonne on Friday and Comex Copper future for the most active March contract was trading at $3.9495 a pound, down 0.7% (3 cents). SHFE Copper future for most active May 2012 contract settled at 61760 yuan per tonne, edged up by 0.3% (180 yuan). Likewise at MCX, Copper for delivery in February was receding by 0.2% or Rs 0.9 at at Rs 433.25 per kg with its intraday high at Rs 434.5 per kg and low at Rs 431.85 per kg.
The dollar index buoyed by 0.2% at 78.72 against the basket of 6 major currencies as the uncertainty over the Greece inability to secure a second bailout still prompted investors to flee away from risky assets and stay on safe haven dollar.
Greece austerity plan was agreed among political leaders, but it is still unable to secure the EUR 130 billion second bailout from EU/IMF. Chair person of Euro group Juncker affirmed yesterday after the meeting between EU finance ministers in Brussels that Greece required to firstly pass the austerity package in parliament on Sunday, find extra EUR 325 million in savings for 2012, and give strong political assurances for continuing the reform implementation after April's general election.
Upon implementation of all these steps, Greece will be able to secure second bailout fund during the next month and shun off the disorderly default. With reference to the Junker statement and general strikes and mounting opposition to cuts in wages, pensions and government spending, Greek Finance Minister Evangelos Venizelos said the parliamentary vote set to begin this weekend amounted to a ballot on euro membership. Greek lawmakers vote this weekend on austerity measures needed for a second international aid package.
Meanwhile, the China's trade surplus surged unexpectedly in January, as imports plunged due to weak domestic demand. Meanwhile, shipments dropped owing to week-long Lunar New Year holidays.
General Administration of Chinese Customs reported on Friday that the trade surplus rose to $27.3 billion in January from $16.5 billion in December. Economists expected the surplus to dip to $10.4 billion. The trade surplus in 2011 totaled $155.14 billion, down from $183 billion in 2010.
Exports fell 0.5% year-on-year in January compared to expectations for a 1.4% decline. This followed a 13.4% surge in December. Most of the factories were shut during the holidays, and this affected shipments in addition to weak external demand.
Imports dropped by 15.3%, much steeper than the expected 3.6% fall. Imports grew 11.8% in December. On a monthly basis, exports dipped 14.2% and imports fell sharply by 22.5%.
In the economic front, the US Reuters/Michigan Consumer sentiment index data due later today is also focused for further cues.
Among other metals at LME, Aluminium was trading flat at $2281 per tonne and Lead was trading higher by 1% at $2197.25 per tonne. Nickel was trading flat at $21,401 per tonne and Zinc was dropping by 0.8% at $2136 per tonne.
Among other metals in the domestic market at MCX, Aluminium was trading lower by 0.2% or Rs 0.25 at Rs 112 per kg and lead remained unchanged at Rs 109 per kg. Zinc was also trading flat at Rs 106.1 per kg. Nickel for delivery in February tested a high of Rs 1073.9 per kg and low of Rs 1059.2 per kg in intraday and is now trading at Rs 1064.1 per kg, down 0.4% or Rs 3.8.
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