Base metals may trade mixed

STOCK MARKET WATCH

"Recent Chinese data shows a 12 per cent decline in the inventories of Shanghai metal exchange, without revealing whether the country's copper consumption has surged or the red metal has been shifted to private warehouses. Therefore, one cannot conclude that the Chinese demand may pull the prices upwards," said Jayant Manglik, head - commodities, Religare Enterprises.

Copper recorded a weekly decline of 2 per cent on the LME, after gaining 0.8 per cent in the previous week. The red metal futures for September delivery gained marginally by 0.2 per cent to $3.545 a pound in early trade on the Comex division of the New York Mercantile Exchange. The price has gained by 17 per cent this year.

Copper has increased 18 per cent this year as the dollar lost 5 per cent against the euro, making the dollar-denominated metal less expensive to holders of other asset classes. The stockpiles monitored by the Shanghai Futures Exchange tumbled 4,837 metric tonnes, or 12 per cent, to 33,992 tonnes last week.

Ashok Mittal of Karvy Commodities Broking estimated a decline in copper prices towards the end of the week after perking up in the beginning.

He expects support to emerge between $7750 and $7770 and resistance at $8200 a tonne in the near term.

"While copper would continue to disappoint the traders, nickel may help them in recovering their losses as the price of this silvery white metal is set to rise at least by 3-5 per cent in the near future," he added.

Nickel is trading slightly above $24,100 a tonne. It may surpass the $25,000 mark and spiral downwards to $23300 a tonne thereafter. The metal is, however, likely to trade between Rs 1060 and Rs 1100 a kg on the Multi Commodity Exchange (MCX). Supply side constraints should support the price upwards.

Lead is likely to decline to Rs 73-74 a kg on the MCX due to the lower-than-expected demand from the consumer sector. The metal is slated to move between $1800 and $1950 a tonne in the weeks ahead.

Lead touched $1,752 a tonne on Friday, the lowest since February 2007. It finally ended at $1,775, compared to $1,830 on Thursday. The metal has surrendered more than 50 per cent since hitting a record high of $3,890 a tonne in October 2007.

Aluminium ended at $2,945 a tonne on Friday after trading in a range throughout the week. But analysts expect power shortages in China, the world's biggest consumer of the metal, to underpin the prices. Zinc, mainly used for steel galvanising, ended at $1,900 a tonne on Friday from $1,870 on the previous day, and tin was $21,000 a tonne from $21,075.