Base metal prices led by copper are likely to decline towards the end of this week after a marginal rise in the beginning on weakening fundamentals.The players had overbought to strengthen their position ahead of the long holiday in London as the market would remain closed on Monday due to Early May Bank Holiday.Traders believe copper may rise by around $100 in the beginning of the week from the current level of $8,350 a tonne and then fall by $250-$300 to $7,800 a tonne. The metal reached an all-time high of $8,800 a tonne on May 11.A strong US data, showing higher-than-forecast factory orders and manufacturing levels, are yet to fully reflect on the metal prices.Data released by the Commerce Department of the US said that the US factory orders rose 3.1 per cent in March, the most in a year, and the manufacturing index rose the highest since May 2006.Additionally, the copper inventory on the LME-registered warehouses has shown little improvement though the five-day national strike in Peru, the world's third-largest copper producer, has ended."So far, the fundamentals remain very supportive for base metals, with rising demand and falling production. The copper price is up 31 per cent this year on expanding global economy and dwindling stockpiles. But, profit-booking at this level cannot be avoided and this may drag the prices down," said a local trader.The domestic secondary copper players were finding it difficult to play safe as the red metal price in London remained highly volatile, driving some players out of their business, the trader added.In the domestic market, almost all base metals, including scrap, however, surged to match the current prevailing prices in the international markets. The copper wire bar went up to Rs 410 on Friday, May 4, from Rs 388 on Friday, April 27.While announcing the annual results on Friday, Debu Bhattacharya, MD, Hindalco Industries said the availability of copper concentrate, the valued raw material for copper-making, was expected to remain tight globally. Hence, the scrap prices would also move in tandem resulting in a higher cost of production. He, however, clarified that the producers of value-added products would continue to score over standard metal producers.Nickel and lead, meanwhile, are nearing their respective all-time highs over supply tightness. Intensified governmental scrutiny would further bolster the prices. Western Australia State Department of Environment and Conservation will stop a 20,500 tonnes nickel concentrate shipment loading, should odour or dust be detected.
