Base metals keep the tempo going

Taking off from the late Friday kerb rally, base metals, led by copper, zoomed past their respective psychological barriers on the London Metal Exchange in early trade on Monday.

Copper touched the new all-time high of $7,032 per tonne in early spot trade, while aluminium set a record of $2,770 per tonne. Zinc, lead, nickel and tin peaked at $3,383 per tonne, $1,250 per tonne, $9,805 per tonne and $9,366 per tonne respectively.

"Copper recorded a phenomenal one-day volatility of more than $300 per tonne while nickel moved up to around $700 which indicates a total fund and speculative support in the market. Today, market is in the hands of traders and can take any direction with any anticipation," a trader said.

No formulae work today therefore, one can not predict the further movement of metals, he added.

Despite all Asian market supported well to the movement in London, profit bookers made some money at the highs. Therefore, the metal price slumped in the late afternoon but, settled higher on Monday in comparison with Friday.

Spot copper, tin and nickel settled at $6,866 ($6,707) per tonne, $9,180 ($9,085) per tonne and $19,380 ($19,155) per tonne respectively while aluminium, lead and zinc settled at lower than their respective previous levels at $2,707.5 (2,721.5) per tonne, $1,170 ($1,205.5) per tonne and $3,280 ($3,297) per tonne respectively.

In all, the metal extended its recovery from Thursday's pullback as funds and other speculative players pushed the benchmark three-month contract as high as $6,847.50 a metric tonne.

Domestic market is also witnessing the surge in metal prices in the international market as copper wire bar, heavy scrap, armature and utensil scrap are breaking all existing records. Copper wire bar closed on Monday at Rs 387 per kg, copper heavy scrap at Rs 365 per kg, armature at Rs 360 per kg and utensil scrap at Rs 340 per kg.

According to Surendra Mardia, senior vice-president, Bombay Metal Exchange, nothing can be said in today's scenario.

Metal prices are just going up and breaking records. Funds which were invested earlier in stocks and safely kept as deposits in banks are now diverted into metals which investors think as a "safe heaven".

Metal demand is directly linked with population which is growing day-by-day and therefore, the demand of metal is going to continue in future also, may be with some replacement, Mardia told Business Standard on the sidelines of the 2-day Indian Metal Conference jointly organised by London-based Metal Bulletin and Kolkata-based Metaljunction.com.

Jignesh Shah, MD and CEO of the Multi Commodity Exchange of India (MCX), said that Indian metal industry is growing rapidly. MCX is organizing several awareness programmes so that the metal traders throughout the country would be able to hedge risk on its platform, he added.

In Shanghai, benchmark July copper contract, which traded at CNY62,150 per tonne on Monday, could not break last week's record of CNY62,500 per tonne, as gains were capped by its 4 per cent daily limit.

Spot copper in China, however, pushed to fresh highs. Spot copper was quoted at CNY63,800-CNY64,000 per tonne, up from CNY60, 320 - CNY60, 470 per tonne on Friday at the Changjiang Nonferrous Metals Trading Market, one of the major spot markets in eastern China.