Scrap Metal Prices and Scrap Metal Auctions

Base metals rose slightly on Tuesday on the LME and MCX as a sudden weakness in the US Dollar came in as a relief. Dollar weakness makes base metals look attractive for holders of other currencies. Other than the dollar factor there was no other positive news as the financial markets are in turmoil and economic situation is worsening. Yesterday’s move in the markets was purely technical and dollar led.

Copper was the only metal that ended in the negative territory, though the loss was on the marginal side. LME inventories for copper jumped a whopping 9,600 tonnes and this factor put pressure on the metal and dollar weakness could not aid in as support. Aluminum prices edged higher on the back of a rise in crude oil prices and a weaker dollar. The rest of the base metals pack was higher due to short-covering and weakness in the dollar.

On the macroeconomic front, the Federal Reserve announced that it would step in to free up the money markets and help defrost the credit tightness by buying unsecured commercial paper directly from companies wanting to issue such paper. Markets took this move positively and hence ended higher.

OUTLOOK

In yesterday’s trade, base metals reacted to the Fed’s expected moves and also edged higher due to the weaker dollar. Base metals from an intra-day perspective are expected to remain volatile and react to factors such as the US Dollar and any kind of economic news from the global front. Since many other economies are feeling the heat of recession, news related to this could hurt market sentiments and pull base metals lower.

We recommend traders to trade cautiously as moves in the US Dollar could change track of base metals in the short-term.

On the macroeconomic front, the US is expected to announce data on pending home sales today. This data is expected to decline as credit conditions have tightened and mortgage rates have also risen. This data could impact base metals negatively.

Copper

Immediate support is seen at Rs.265 levels for MCX November contract. Further below, support is seen at 260 levels. Copper is expected to trade lower.

Whereas resistance is seen at Rs.275 levels & further upwards at Rs. 279.50.

Zinc

Immediate support is seen at Rs.74.30 levels for MCX Oct contract whereas crucial support is seen at Rs.72.40 levels. Zinc is expected to trade lower for the day.

Short-term resistance is seen at Rs76 whereas major resistance is seen at Rs 77.60.

Zinc prices are currently trading around 93 levels. Immediate support is seen at Rs 92.30 levels for MCX Feb contract whereas crucial support is seen 90.60 levels.

Short-term resistance is seen at Rs95.40 whereas major resistance is seen at Rs97.

Source: www.commodityonline.com

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