Nirmal Bang recommends to sell base metals on rally

Nirmal Bang has come out with its report on base metals. The research expects base metal prices to remain weak on account of weak economic data by releases by China and a stronger US dollar against major currencies. Selling on rise is recommended for the day.

Industrial metals prices gave up gains yesterday to end flat as the dollar strengthened and the outlook for top metals consumer China improved after data indicated the country's economy is stabilising. However, prices were supported by the depreciating rupee on Indian exchanges.

According to Reuters, over the past year, warehouses in the Dutch port of Vlissingen run by Pacorini Metals, a unit of commodity trader Glencore, have mushroomed from 19 to 36, enough to house nearly 2 million tonnes of metal, about a fifth of total aluminium stocks, in an area the size of 40 football fields. The global nickel market was in supply surplus by 32,200 tonnes in the first eight months of 2012, the latest monthly bulletin from Lisbonbased International Nickel Study Group (INSG) showed on Thursday. Chinese copper smelters are seeking to increase treatment and refining charges (TC/ RC) for 2013 raw material concentrate term imports by about a quarter from this year after they received higher charges for spot deals this week.

U.S.-based Freeport McMoRan Copper & Gold Inc, the world's biggest listed copper company, is not keen to build new smelters as excess supply and low margins render the smelting business unattractive, its chief executive said. The World Trade Organization barred China on Thursday from imposing duties on certain U.S. steel exports, siding with U.S. President Barack Obama in a dispute with Beijing over a type of steel made in two election battleground states. 

Fundamental outlook:

Industrial metals prices are trading lower on international bourses today. We expect prices to remain weak on account of weak economic data by releases by China and a stronger US dollar against major currencies. Selling on rise is recommended for the day.

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