Base Metals - Aug 24, 2020 - Mr. Tapan Patel - Senior Analyst (Commodities), HDFC securities
Base metals complex gained the most during the week with Zinc and Copper led from the front. Zinc prices at LME gained the most by more than 3% on strong demand recovery. LME Nickel prices followed the cues on expectations of higher demand for EV batteries gaining more than 2% while Copper prices at LME rose by nearly 2% on fear of supply disruption and demand growth optimism.
Copper prices witnessed correction on Friday with dollar recovery and BREXIT concerns on stalled talks over negotiations between the UK and European Union. The expectations of lower supplies estimates from world's top miners may continue to support copper prices to trade higher in medium term.
LME Copper prices are struggling to sustain above the key resistance of $6645 per tonne. The breakout may lead prices towards $6800 in the medium term. For the short term, we expect prices to trade with positive bias MCX, Copper September contract has important resistance at Rs. 525/530 and support at Rs. 502 for the coming week.