Base metals futures on the MCX platform mainly copper and zinc are expected to rule higher following the firmness in London markets supported by on weaker dollar and Chinese buying.
MCX copper April 2008 contracts were up Rs 11 to trade at Rs 330 per kg on Wednesday over previous day while Zinc April 2008 contracts also moved up by Rs 2 to settle around Rs 95.60 a kg and Aluminum April 2008 contracts rallied by Rs 3 to trade at Rs 116.75 per kg on continued buying support from local participants amid firm overseas markets. Base metals futures in the overseas markets have sharply rallied during Europe and early Asian markets supported by a weaker dollar and growing demand due to peak consumption period in China.
“Dollar continues to remain under pressure on financial uncertainty and recession fears in US emerged in the form of a slump in existing home sales in January and a drop in consumer confidence which came in at a 5 year low,” Debjyoti Chatterjee of the MAPE Group, said. MCX April copper is expected to gain from current levels and test Rs 331 levels. Zinc is expected to gain further from current levels and test Rs 98 a kg, he said. Traders in Shanghai remain upbeat on prices outlook after the gap between LME copper (including Chinese VAT) and Shanghai futures widened by about 500 Yuan to 1,585 Yuan, making the metal expensive to lure metal out of China.