LME Base Metals Succumb To Weak Europe Economic Data And US Budget Concerns

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LME Base Metals Succumb To Weak Europe Economic Data And US Budget Concerns

LME base metals are mixed on weak economic data from Europe and as well as fiscal cliff concerns in US. Most of the higher volume metals like Copper, Aluminium and Zinc were down while Lead and Nickel were up. Copper and other metals lost the two day gains on LME on Wednesday on renewed concerns relating to higher US budget deficits and European debt crisis.

Greece concerns remained as meeting of Eurozone finance ministers earlier in the week ended without any final decision on whether to urgently release Euro 31.5 billion bailout installment for the country.

In US, the Bureau of Labor Statistics said that producer prices fell by a seasonally adjusted 0.2% in October, compared to expectations for a 0.2% increase, after rising 1.1% in September. After the release and even in early Asian trades Dollar is moving lower against the Euro. The USD was seen trading at 1.274 against the Euro, down 12 pips.

The U.S. Census Bureau said that wholesale inventories rose by 0.7% in September, above expectations for a 0.5% gain. Business inventories rose by an unrevised 0.6% in August.

US federal government started the 2013 budget year with a $120 billion deficit, an indication that the economy was on a path to its fifth straight $1 trillion-plus deficit. Treasury Department said Tuesday that the October deficit was 22 per cent higher than the same month last year.

Spain showed a decline in new industrial orders. Spanish new industrial orders declined by 5.7 percent in October compared to 1.7 percent in September. In UK, the number of people claiming unemployment benefits increased by 10100 in October as against the expectations of 5100 people.

LME three month Copper forwards were trading at $ 7635 per tonne, down $ 7 on Thursday. The markets slipped after trading nearly positive till the last session. Traders booked profits before the closing as the news of Chinese production numbers and optimism on its economy got discounted.

Indian Copper futures were sideways at the time of closing at Rs 419.6 per kg, down 0.21 percent. MCX Copper has seen range bound trades in last one week with upper cap at Rs 425 per kg and floor at Rs 418 per kg.

LME Nickel forwards that closed up $ 105 per tonne at $ 16100 per tonne, was unchanged on Thursday. Support from steel markets after the bounce in prices is set to help steel raw materials like Nickel as well. MCX Nickel ended last day's session at Rs 887 per kg, up 0.66 percent.

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