Expect base metals to move down: Emkay

Emkay's research report on base metals & energy

Base Metals

In New York, COMEX copper for May delivery closed at USD 326.50 a tonne, down by USD 2.30, or 0.70 percent.

Copper prices were down as a slowdown in euro zone economy and poor US industrial production hurt prices.

A build up in copper inventories at LME warehouses and a stronger dollar pushed prices further down.

Base Metals are expected to move down as a slew of weak economic data from China and rising supplies are likely to put pressure on base metals. US housing data expected slightly positive today could limit the downside.

Three-month copper on the London Metal Exchange ended at USD 7,198, down from Tuesday's close of USD 7,245, having earlier hit a low of USD 7,101 a tonne.

Energy:

U.S. crude futures for June delivery settled up by USD 0.09 at USD 94.30 a barrel, up by 0.10 percent.

Higher than expected withdrawal in inventories which came at -0.6M helped push crude prices higher.

Crude prices were also supported as talks had stalled between the United Nations' nuclear agency and Iran over Tehran's suspected atomic bomb research again stoked supply concerns from the Middle east.

However the upside in prices was limited as negative euro zone GDP and poor US industrial numbers weighed on prices. We expect crude oil prices to go down as weak demand concerns from euro zone and China can push prices down.

US natural gas futures ended slightly higher due to technical buying and profit booking.

Natural gas is expected to move in a range today ahead of the inventories data.

Front-month gas futures on the New York Mercantile Exchange ended up 4.6 cents, or 1.1 percent, at USD 4.07 per million British thermal units after trading between USD 4.011 and USD 4.078.

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