Profit booking, weak Chinese data bother base metals: Angel Commodities Broking

Views of Ms. Kaynat Chainwala (Research Analyst- Base Metals, Angel Commodities Broking):

"The negative turnaround in the bullish base metals story came in the last week after the sixth and most powerful missile test by North Korea on 3rd Sep'17. Following this, there was a sharp wave of correction across all the base metals with global investors cutting their net long speculative positions in the segment.

Currently, base metals prices are quite far from multi year highs touched in August hit by a double whammy of weak Chinese economic data and easing supply woes in some metals. Talking about Copper, the metal has corrected around 7 percent on both LME and MCX since 4th Sep'17 hurt by global economic uncertainty and unprecedented 30 percent surge in LME stocks. Other base metals share similar fate with Aluminium down by 2 percent, Zinc 7 percent, Nickel 8 percent and Lead lower by 5 percent in the same period.

Still, base metals are positive on a year-to-date basis thanks to spectacular price rally boosted by strict environmental crackdown in China as a result of which production of 10 nonferrous metals including copper, aluminium, lead, zinc and nickel, fell 2.2 percent to 4.42 million tonnes in Aug'17. The journey forward will be worth watching as certain key events are lined up next month starting with 19th National Congress of China and output cut in winter months."

Source : Equity Bulls

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