Base Metal prices ended the last day of the year on stronger note. Nickel was the top gainer for the day and for the year as well.
However copper prices closely followed nickel as it is ended the year at new high. Weakness in the dollar index supported prices to end higher. US equity markets ended modestly higher on a low volume trading session.
Both London Metal Exchange and Shanghai Futures Exchange would remain closed today. So price movement might remain tepid in the Indian markets. Japanese and Chinese equity markets would also closed today while most of the other Asian equity markets are trading higher with gains of anywhere between half to one percent.
On the fundamental front, Chilean copper miner Codelco indicated that its operations were normal now after a strong earthquake earlier disrupted production. Dollar index is trading up with gains of close to half a percent on the back of weakness in the Euro as data later is expected to indicate unchanged PMI numbers of Euro zone in the month of December.
From US, ISM manufacturing and prices paid are expected to come in higher along with continued growth in construction spending and thereby would support base metal prices. Overall, in the absence of any cues from international market base metals might consolidate with positive bias.
Aluminium
Aluminium prices on LME ended higher by 0.6 percent however stronger rupee limited the gains in Indian market.
Aluminium stocks on London Metal Exchange witnessed draw-downs of 3,550 tonnes as against build-up of 8,025 tonnes on the previous day.
On a weekly basis, stocks rose by a modest 1,775 tonnes. Warehouses in China witnessed a modest decline of 453 tonnes.
Copper
Copper inventory on London Metal Exchange rose for 13th consecutive trading day as stocks increased by 1,550 tonnes thereby taking the total weekly increase of stocks to 6,825 tonnes.
Warehouses in China witnessed increase in stocks by 11,465 tonnes or 9.5 percent thereby taking the total stock to 131,891 tonnes.
The market continues to remain in backwardation and the spread currently stands at -$50/tonne indicating tight supply conditions.
Lead
On London Metal Exchange, lead stocks rose by 1,425 tonnes as against decline of 850 tonnes on the previous day. On a weekly basis too, stocks rose by 425 tonnes.
The basis on LME has declined to -$13.5/tonne indicating spot prices trading at a premium and might have been as a result of supply constraints.
The cancelled warrant ratio however declined indicating that the inventory increase might continue in the near term.
Nickel
Nickel is the top performer among the base metal pack as it ended the day with gains of 1.6 percent.
Stocks on London Metal Exchange rose by 228 tonnes as against decline of 276 tonnes on the previous day.
The cancelled warrant ratio of Nickel remains one of the lowest and thereby has been an area of concern for prices. Stock movements might continue to remain uneven given the cancelled warrant ratio.
Zinc
After witnessing build-up of 3075 tonnes on the previous day, zinc stocks on London Metal Exchange declined by 275 tonnes.
On a weekly basis stocks however rose by 2,800 tonnes and the warehouses in the China witnessed build-up of 2,052 tonnes.
The lead-zinc spread ended at 5.45 as against 5.1 on the prior period. Given the decline in cancelled warrant ratio of lead, zinc might outperform in the near term and thereby the spread has potential to move lower.
