Major base metals futures on MCX moved in the reverse direction last week with lead metal recovered its previous loss while nickel lost some ground. However, copper futures ruled firm on some buying support following firmness in LME on reports of labour disputes and fear of shortage. Lead metal futures recovered nearly 10% on some buying support at lower level following supply disruptions while zinc futures were largely steady at previous levels. In the bullion market, gold and silver both recovered marginally following London market but traders remain cautious given the current credit market and sub-prime worries. Crude oil futures on MCX finally ended steady with marginal gain on global factors.
The expiring July Lead contract was up Rs 12.85 or 10% to trade at Rs 133.50 per kg. The open interest was 6,740 tonne. LME Lead was traded at $3,263 a tonne, up by nearly $300 a tonne over last week on reports of decline in LME stocks. The market has realized last week?s sell off was too vicious as fundamentals remain intact with the 10% Chinese export tax, ongoing supply disruptions and dwindling LME stocks, said JP Morgan analyst Michael Jansen. Jansen expects LME lead to return to $3400-$3500 a ton near term.
The active nickel contract was up Rs 75 to trade at Rs 1,200.90 per kg. The open interest was 1,843 tonne. LME nickel was traded lower at $29,940 a tonne, down by $1,460 a tonne. London nickel slid to a fresh eleven-month low on Friday with a further build in LME-monitored stockpiles of the metal illustrating the ongoing oversupply in the market, which has added to faltering demand from stainless steel manufacturers to drive prices lower in recent months.
The active August copper contract was up Rs 2.25 a kg to trade at Rs 316.65 per kg. LME copper was traded higher at $8,001 a tonne, up by $145 on news of GrupoMexico workers planning to strike at three mines. The active August Zinc contract was steady at Rs 142.05 per kg. London zinc was traded lower at $3,518 an ounce on Friday.
The active August crude oil contract was steady at Rs 3,096 per barrel. The open interest was 18.17 lakh barrels. Crude oil WTI spot was traded higher at $76.84 a barrel, up by $2. The US government data show that crude-oil inventories on the Gulf Coast fell by 3.9 million barrels in the week ended July 27.
The active August gold contract was up Rs 18 to trade at Rs 8,704 per 10 gram. London gold was traded $2 higher at $663.60 an ounce. The outlook (for gold) is still rather mixed at the moment, said TheBullionDesk.com analyst James Moore.
The active August silver contract was higher at Rs 187 to trade at Rs. 17,548 per kg. The open interest was 354,180 kg. Silver in London was traded lower at $12.98 an ounce on Friday.