Posts Tagged ‘nickel’

COMMODITY WEEKLY COMMENTARY 11th – 15th October

International gold hit yet another new high and tested $1364 as the US currency slumped to fresh 15-and-a-half year lows against the Japanese Yen. The euro and British pound both neared 8-month highs vs. the dollar after their central banks failed to cut rates or expand their quantitative easing. The shiny metal continued breaching new high records by taking advantageof concerns surrounding global recovery which raise speculations that central banks will add tostimulus to bolster growth. This time domestic gold and silver also rose to their fresh highs on MCX. Base metal prices traded on the mixed note with lead prices ending in red while copper along with aluminium and nickel prices managing to end in the green territory.

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The base metal prices remained volatile mainly due to weakness in the dollar index and profit taking at highlevels. In energy counter crude oil remained volatile as prices got support by a weaker dollar and investors’ demand for higher-yielding assets. Prices were also under pinned by the drop in motor gasoline and distillates inventories off setting the buildup in crude inventories.Regarding agro commodities, oil seeds and edible oil counter revived on some bargain buying atlower level amid falling dollar index. Strong buying by soyabean millers together with rising soyameal export also encouraged buying in both spot and future market. Fresh arrivals in Haryana and Rajasthan washed out the profit of guargum and guarseed futures. Prices were also discouraged by strong production estimates of guarseed in the current year.

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Despite tight supply position against strong demand pepper futures closed the week on negative note on profit booking. Turmeric rose on improved demand. Chilli was sideways with upside bias on mixed fundamentals while jeera and cardamom moved southward. Receding stocks in major mandies accompanied with strong export demand by traders and exporters gave terrific rise tothe mentha prices. Even in future market it breached the level of 950 on MCX. Mint exports inApril- August, 2010 surged by 2 percent to `723.95 lacs against 595.57 lacs reported last year inthe same period. Chana appeared shy to breach the resistance of 2300 and it closed down on profit booking at higher levels.

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COMMODITY WEEKLY COMMENTARY 4th – 8th October

Once again international gold prices tested their new highs last week as prices breached the psychological level of $1300 and silver marked the 30 year high on COMEX division. However local gold prices were mostly remained sideways during the week amid stronger rupee and profit booking which limited the upside in prices.

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Nevertheless, silver once again overshadowed gold movements and surged high to claim 33000 mark on MCX. In base metal pack copper along with nickel, zinc and lead started the week with positive energy but dull economic data from U.S and Europe economies pressurized the prices in later part. However improved Chinese  manufacturing data once again underpinned the prices and supported copper and nickel to end the week in green zone.


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Earlier, shanghai copper dropped to its lowest in more than a month last week as China’s move to curb property prices dented sentiment, but losses were limited by improving demand prospects and ongoing weakness in the dollar. In energy counter crude oil settled up last week helped by data showing a drop in U.S. crude and product inventories.


Further fall in dollar index also helped the prices to move up. U.S. crude stocks fell 475,000 barrels last week, data from the Energy Information Administration showed. U.S. distillate inventories fell by 1.27 million barrels in the week to Sept. 24, counter to analyst expectations for a 300,000 barrel build.


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In agro commodities spices pack witnessed see saw moves during the week and remained volatile. Pepper futures ended the week with negative impression amid weak exports and low trading activity. As per Spices Board data, pepper exports from India have gone down by 5% in volume term during April-August 2010 as compared to same period last year. Jeera futures also traded on a negative note during the week on extended selling pressure backed by weak domestic and export demand. Expectations of rise in acreage under jeera crop this season have also supported the down side.

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In oil seeds section soya bean and mustard remained under pressure as factors like bumper soya crop expectation and pick up in fresh arrivals to the spot market led the market to show a negative trend. The chana futures traded on a positive note for most part of the week retreating from previous losses on fresh buying from retail sector.

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COMMODITY WEEKLY COMMENTARY 6th-10th September 2010

International gold prices rose back above $1250 an ounce for the second time in a week, as government bonds ticked lower together with energy prices. Silver prices also touched a new 16-week high at $19.57 an ounce on international bourses while it made a life time high on MCX.

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Apart from bad economic news globally, a weak Rupee is also pushing up prices in India. Base metal pack also ended higher last week on positive manufacturing and improved jobless data from both China and US which pushed prices higher. However, lower dollar index also supported prices. After being top performer for many days, Nickel has marginally underperformed other base metals as inventories on LME increased. In energy counter, crude oil futures got jiggled in hands of both bulls and bears. Prices remained volatile for the week amid mixed fundamentals.

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On one hand, prices got support from improved economic data but upside was offset by building inventories. The positive sentiment was offset by the effect of the abysmal inventory status report.

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U.S commercial crude oil inventories increased by 3.4 million barrels from the previous week; at 361.7 million barrels. U.S. crude oil inventories are above the upper limit of the average range for this time of year. Total motor gasoline inventories decreased by 0.2 million barrels last week, and are above the upper limit of the average range.

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It was an action pack week for agro commodities in which they agro commodities saw big movements. Most of the spices closed on negative note bearing in mind the overseas weakness coupled with arrivals in some spices. Dip in Brazilian and Vietnamese pepper parity put pressure on Indian pepper as well and hence we saw two week continuous weakness. Similar to pepper, jeera futures also dragged down on dull spot trading. There was no respite for turmeric futures and they fell like nine pins for straight seven week on low stock buying amid the news of increase in acreage in Andhra Pradesh.

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Cardamom was sideways, while chilli was marginally up on short covering tracking the firm spot markets. Due to strong arrivals in major mandies coupled with beginning of fresh sowing of kharif pulses, chana futures surrendered their previous gain to some extent. Timely arrival of monsoon in southern and western regions has improved the sowing activity. Selling intensified in oil seeds and edible oil on the back of better crop estimate together with weakness in overseas market. Damaged crops in Russia, Europe and Canada, boosting demand for U.S. supplies to make animal feed, food and fuel revived maize futures. Guar counter was up on lower level buying.

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Commodity Weekly Commentary 5th-9th April

In the week gone by interesting moves were witnessed in gold futures. Gold prices surged high on international bourses while strong rupee kept domestic gold prices under check. International gold futures ended the first quarter with a positive note on buying driven by volatile currencies, firm stock markets and oil as well as euro zone debt but it struggled to sustain gains since hitting a record above $1,200 an ounce last December.

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The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust said that its holdings stood at 1,129.823 tonnes as of March 31, 2010. Even, silver showed smart gains on international as well as on domestic exchanges. In base metal pack; copper futures hit 20-month highs last week, starting the second quarter in upbeat mood as improving demand sentiment and investor cash supported metals.

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Falling LME inventories helped aid sentiment in recent weeks, with copper stocks dipping 1,875 tonnes to 512,450 tonnes, having hit 6-1/2 year highs at 555,075 tonnes in mid-February. Nickel stood as outperformer last week among all the base metals as prices rose 34.9 percent in the first quarter of this year, outperforming other metals traded on the LME.

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The buying was triggered by expectations of stronger demand from stainless steel mills. In energy counter;  crude oil futures hit their highest level this year and posted the loftiest settlement for a front-month crude  contract in almost 1.5 years as a weakening dollar attracted buying.

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Bearish trend was witnessed in most of agri commodities in the week gone by. Guar pack futures fell last week tracking weakness in the spot market, hopes of normal monsoon rains in 2010 and sufficient stocks. The movement in guar seed is largely driven by the monsoon report as it is a rain-fed crop.

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However, in top producer Rajasthan, output is likely to drop by 80% to 241,000 tonnes in 2009/10 as scanty  rains trimmed area and yields. Profit booking at higher levels, drop in spot prices and rising arrivals  kept chana futures under check last week. In oil seeds section; soya bean and soya oil futures also  tad down tracking losses in the U.S. market, while rapeseed traded sideways tracking weakness in soya  market on output concerns.

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Traders are now speculating that output would be lower for mustard than the estimates considering the arrivals in spot market. In spices pack; jeera and chilli prices settled in red zone while pepper futures surged high for the third consecutive week due to extended bargain buying on the exchange platform. The factors supporting the rise in prices are firm rates in the international markets and active buying of exchange because of tight supply situation in the physical markets.

COMMODITY WEEKLY COMMENTARY

Most of the commodities finished lower last week on heavy profit booking. Recent bounce back in dollar index compelled commodity traders to quit their long positions. However, some commodities viz., aluminum, nickel and natural gas moved on their own fundamentals and ignored the upside of dollar index. Threat of closure of two mines of Alcoa amid the concern that about three quarters of LME  stockpiles have been tied up by long term financing deals by traders and merchants, raised the premium
on aluminum, sent aluminum prices higher.

Likewise, nickel surged on lower level buying. Rest of the  base metals erased their previous gains to some extent on rise in dollar index amid some negative data.

Gold and silver gave up their previous gain due to the improvement in dollar value. However, recent fall in gold prices brought back smile on consumers face and there is an expectation that import will increase. Negative data, fall in GDP of Japanese economy, higher dollar amid expectation of slower demand of crude in 2010 by EIA hammered crude oil prices and it touched two months low. On the contrary, natural gas jumped on increased seasonal demand. Cold snaps in northwest and Midwest revived the demand of natural gas and it recovered across the bourses, where natural gas is used 72% for heating purpose.

Coming to agro commodities, bears completely dominated all commodities. Selling pressure was witnessed throughout the week. Some short covering in many agro commodities witnessed on Friday.
Less demand from processors amid declining export queries exerted pressure on guar complex. Oil seeds and edible oil complex reacted on improvement in dollar amid new crop estimation by Brazil and Argentina generated selling in futures as well spot market across the board. Fall in crude oil prices gave further pressure on prices. Spices made lower trading range last week. Higher Indian parity, lower export queries in the middle of subdued domestic demand compelled spices to trade low.

Speculative activities in turmeric were on high last week. Throughout the week, December contract traded into upper circuits and April contracts traded moreover on lower side, which increased the gap between contracts to more than 3400 level. Wheat futures cooled down owing to increased supply in spot market. Crushing season of sugarcane has already started which has led to a nonstop decline since last three weeks.