Base metals complex traded higher over the week as most of the metals gained on strong demand outlook amid positive economic data and supply concerns, according to Tapan Patel, Senior Analyst (Commodities) at HDFC Securities.
However, base metals’ gains were capped on inflation concerns, he noted. The high inflation may lead to policy tightening from banks, which may pressure base metals. China will tighten controls on raw materials to help limit costs for companies that have been pressured by the surge in commodity prices, China National Radio reported, quoting Premier Li Keqiang. China’s producer prices surged the most in more than two years.
On Monday, zinc’s three-month contract gained around $46/mt over the week. Copper contract gained $220/mt while aluminium contract witnessed a modest jump of $31/mt. Nickel LME contract increased by $630/mt on Monday, compared to previous week.
HDFC Securities expects copper prices to witness some correction with support at Rs672/kg and near-term resistance at Rs698/kg. MCX Nickel April support lies at Rs1180/kg with resistance at Rs1260/kg.