Scrap Metal Prices and Scrap Metal Auctions

BASE METALS OUTLOOK

The base metals pack has been reacting to the currency market movements amid a seasonal slowdown in demand. In the past six weeks we have witnessed a broad-based sell-off in commodities on the back of a stronger US Dollar and weaker US macroeconomic data in the US, Europe and Asia. Though demand has slowed down and is expected to come down further, the most important factor i.e. SUPPLY will help to hold prices higher. Supply-related issues are expected to rise especially in the case of copper, aluminum and tin. This factor could help to push metals higher. Given the power shortages in key producing regions like China and southern Africa, aluminum prices will receive support. Hence, even if demand for base metals is a concern, issues from the supply front would support prices at higher levels. In the coming week, we expect base metals to trade on a volatile note.

On the macroeconomic front, the US is expected to announce data on consumer credit today. This data is expected to decline to around $9.0B as against $14.3B for the previous time. This factor could weaken short-term sentiments for the US Dollar and could push base metal prices higher. However, this weakness in the dollar would be short-lived as the overall trend is strong. We expect trade in base metals to be volatile on the back of the currency factor.

Copper

Immediate support is seen at Rs.303.45 levels for MCX November contract whereas crucial support is seen Rs.298.70 levels. Short-term resistance is seen at Rs.312.25 whereas major resistance is seen at Rs.317.

Zinc

Immediate support is seen at Rs.76.50 levels for MCX September contract whereas crucial support is seen Rs.75.40 levels. Short-term resistance is seen at Rs.79.60 whereas major resistance is seen at Rs.81.30.

Excerpted from http://www.commodityonline.com/futures-trading/technical/FlashbackBase-Metals–8th-sept-2008-6041.html

Filed under: Base Metal Prices