Base metals bounced back later during the day as the weakness in the U. S. dollar helped prices on Tuesday, but gains were tempered by perceptions that the road to economic recovery would be long.
Base metals rose on MCX in line with the rise on LME. MCX Zinc and Copper futures rose by 0.80 percent each in the last trading session.
South Africa’s mining industry has been hard hit by sharply lower commodity prices due to the global economic downturn and is taking a “severe strain” – South Africa’s Minister of Mineral Resources.
Japan’s output of rolled copper products fell to 48,308 tonnes in May on a seasonally adjusted basis, down 41.5 percent from a year earlier, preliminary industry data showed on Wednesday. The figure represents a 13.8 percent increase from April, the Japan Copper and Brass Association said.
U. S. housing market data from the United States pointed to a sluggish economic recovery, while surveys of purchasing managers in the Euro zone showed meaningful growth was unlikely to return before next year.
Base metals look weak for the day on the back of raised demand concerns. Aluminium is the only metal that does not look weak as its futures are trading at a premium of $75 in China. Any further slide in the dollar may prevent downside in base metals. We recommend selling on rise.
