Zinc Tips

The Minister of Steel, Shri Beni Prasad Verma has said that during the year 2011-12, the country's total production of iron ore was 169.66 million tonnes (provisional) as against the total estimated consumption of about 116.3 million tonnes by the domestic iron and steel industry. Therefore, production of iron ore in India was in excess of the total estimated domestic consumption by the iron and steel industry. 

As per the available information, the hard coking coal spot prices are on a declining trend in international market during last one year and have fallen from the level of $310 per tonne in June, 2011 to $145 per tonne in October, 2012 (Free on Board (FOB) Australia; Source: SBB, as provided by Economic Research Unit, Ministry of Steel).

Base Metal Updates ( Copper Tips )

Copper & other Base Metals may rally too:

Copper & other Base Metals may also rebound from recent slumps to rise substantially on expected easing from China, the world’s largest consumer of Base Metals. There have been reports that Chinese leader Wen Jiabao said China may have to ease monetary policy soon. Copper production in 2012 has picked up, but not to the level that industry expected. Scrap supply has become the savior of the copper market for the past two years, bridging the gap between growing Copper demand and stagnant mine supply. Chilean Copper production is starting to pick up after a shaky start to the year, with a rise of 2.5% in the first half of 2012 in the world’s largest copper-mining country. Chinese Copper production is running higher than expected, growing at 20% year-over-year. Copper Trading remains on the weaker side yet because of the modest global growth seen in the first half of 2012.

Data out of China shows Lead acid battery production rose by 45% year-over-year in July alone and has risen 25% year-to-date. This should be supportive for the Lead market. Battery production represents nearly 70% of total Lead demand in China. Lead supplies have tightened because of the strength of demand, and its likely solid demand will continue into year end.

MCX Copper Updates

MCX Copper futures are trading on a weak note following the frail outing for world equities and a sell off in the LME copper futures as global economic worries stayed in focus and the US dollar maintained its firm tone. The anti austerity protests turned ugaly in Greece and Spain and the Spanish 10-year Government bond yield jumped back over 6% on news that Catalonia wants to leave Spain. The LME Copper is down $93 or 1.10% to trade at $8161 per tonne right now.

The Spanish worries hit the stock markets in Europe hard and the major indices are down around 1.5-2%. Spanish stocks plummeted by 3.40% on the Catalonia effect. The Euro tumbled to 1.2850- its two-week low level on these cues. Germany cleared the last legal hurdle to ratifying the euro zone's new bailout fund on Wednesday with a cabinet declaration that addresses concerns raised by the country's Constitutional Court, according to media reports. However this was already factored in the market and the Spanish worries seemed to be the sole factor driving the market forces today.

LME Copper fell through the 8200 levels and gave up bulk of its yesterday's gain. The metal is holding on quite tenuously amid weak cues from equities and could fall further if equities turn in further bearish. Reports of Chinese bonded copper inventories surging to record highs are not helping the red metal much either.

In other metals, Zinc, Lead and Nickel are down more than 1% each. MCX Copper futures for November yet again failed to hold on around Rs 445 levels and fell in the afternoon trade. The counter quotes at Rs 442.25, down Rs 2.75 or 0.62% on the day. There has been a sharp rise of 6.80% in the open interest for the counter indicating heavy short selling as a critical break under Rs 450 in last week turns the sentiments bearish.