Base metals down in red on profit booking

After opening in green, the base metal complex saw a round of profit booking, pulling down all of them down into red by the end of day. Aluminium was the only metal to end in green with a gain of 0.11% on MCX

The Asian equity markets closed strong, Europe was trading mixed. However, the US retail sales data came in at -0.5% as against expectation of lower fall of -0.3%. This created pressure on base metal prices

On the fundamental front, Rio Tinto declared its second quarter numbers. The refined copper production came in lower by 10%, compared to same quarter in 2009. The production was lower because of the ongoing maintenance activities. In 2010, Rio Tinto’s production of refined Copper is expected to come in at 380,000 tonnes

European Nickel is planning to start Nickel laterite production in Turkey by 2012 that is expected to increase its production to 45,000 tonnes

OUTLOOK

In the morning, most of the Asian markets are trading lower, given the flat closing of US equity markets. The Euro is trading slightly higher. The base metal prices in the electronic session of LME are also trading slightly on the higher side

China has released its Real GDP growth for second quarter which came in at 10.30% as against prior figure of 11.90%. All the other data like the industrial production and Retail Sales came in lower than previous numbers. This shows that the Chinese government is able to cool down the economy, at least for the time being. This is slightly negative for base metals as the demand from China may come down.

From US, data relating to industrial production for the month of June is expected to come in at -0.10% as against prior growth of 1.20%. This might again be slightly negative for the base metals. However the jobless claims are expected to come in lower than the prior reported figure. So there are

So given the economic data expectations, the base metals are expected to consolidate with a negative bias