Broking Firm Kotak Commodity Services Gave Following Outlook on Base Metals Segments

Broking firm Kotak Commodity Services gave following outlook on base metals segments:

Copper - MCX Copper may note some decline tracking slight retreat in international markets, however the downside. LME Copper trades slightly lower after noting sharp gains yesterday. Putting pressure on the prices is impending fiscal impasse in US and fears of deepening recession in Euro Zone. Prices may further come under pressure tracking choppiness in US Dollar and global equities and higher stocks at exchange warehouses. Stocks at LME rose by 3,850 tonnes. The downside may however be capped amid hopes of improving demand from China and US tracking signs of stabilization. Prices will further track economic releases and its impact on global currency and equity markets. As for today, focus will be on Euro Zone ZEW Economic Sentiment. Support for February copper is seen at INR 440 while resistance is seen at INR 452.

Aluminum - MCX Aluminum may note some decline tracking slight retreat in international markets however the downside remains capped. Weighing on prices is jump in stocks at exchange warehouses coupled with weak demand outlook. Stocks at LME fell by 275 tonnes after hitting record high of 5.2 million tonnes last month. Support for Aluminum December contract is seen at INR 113.5 while resistance of INR 116.5.

Zinc - MCX Zinc may note some decline tracking slight weakness in international markets however the downside remains capped. Weighing on prices is higher stocks at exchange coupled with excess supply in physical markets however higher cancel warrants ratio at LME may cap the downside. Stocks at LME fell by 2,700 tonnes after gaining by 34,650 tonnes last week and hitting new 17 year high of 12,35,975 tonnes while cancel warrants hovered above 51%. Support for MCX Zinc December contract is seen at INR 111 while resistance is seen at INR 114.

Nickel - MCX Nickel may note some decline tracking international exchange. Weighing on the prices is higher stocks at LME warehouses coupled with higher surplus in physical markets. Also putting pressure on the prices is sluggish demand from China and improvement in supply of nickel ore from Indonesia. Stocks fell by 534 tonne after gaining by 2,184 tonnes last week. However revised estimates of lower supply overhang in physical market next year may cap the downside. Support for MCX Nickel December contract is seen at INR 945 while resistance is seen at INR 980.

Lead - MCX Lead may note some decline tracking copper prices however the downside remains capped. Prices may come under pressure tracking higher stocks at exchange warehouses coupled with supply glut. However hopes of robust winter related demand and higher cancel warrants at LME warehouses may cap the downside. Stocks at LME fell by 2,000 tonnes while cancel warrants near 46%. Support for MCX Lead December contract is seen at INR 122 while resistance is seen at INR 126.