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| Base metals may remain volatile | |
| MARKET OUTLOOK | | Dilip Kumar Jha / Mumbai January 04, 2009, 0:35 IST | |
Base metals may remain volatile this week on short covering and profit booking. Active participants on the commodity bourses may continue short covering to mark the beginning of 2009. However, any upward march in base metals from the current levels may prove an opportunity to book profit for speculators.
Most of the metal procurement and hedging contracts expired by December-end. These contracts will take another week or two for renewal. Till a transparent view emerges in the global base metals market with renewal or cancellation of contracts, traders would prefer to take need-based position in the short term, said an analyst.
“During the week, short-term blips can not be ruled out initially. But, as the week progresses, market participants would resume their business after a week-long holiday and book profit,” said Navneet Damani, a base metals analyst of Anand Rathi.
Base metals fared exceedingly well last week with fewer participants. Copper shot up 11.38 per cent to $3,219 per tonne from $2,890 on the benchmark London Metal Exchange (LME), while zinc surged 11 per cent to close at $1,260 from $1,135 in the beginning. Nickel and lead witnessed trading interest and perked up by 36.5 per cent and 25.11 per cent, respectively.
Stainless steel producers, who use about 70 per cent of the global nickel production, booked the metal for their near-month requirements in anticipation that the metal may surge in future. Thus, nickel ended the week higher at $13,050 per tonne from $9,560 per tonne in the beginning of the week. Lead closed at $1,111 per tonne from $888 per tonne. Aluminium plunged to $1,445.5 on Tuesday from the Monday’s level of $1,516. However, the metal bounced back towards the end of the week to settle at $1,520. Supporting Damani’s views, Naveen Mathur, head (commodities), Angel Broking, sees limited upside potential in base metals throughout this week. Little bit of technical buying may stretch base metals during this week, Mathur added.
On the LME, the most active near month contract of copper may move between $3150-3300 per tonne while zinc and nickel could range between $1215-1300 per tonne and $12750-14350 per tonne respectively.
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