Base Metals - Aug 31, 2020 - Mr. Tapan Patel- Senior Analyst (Commodities), HDFC securities
Base metals prices rallied for the second consecutive week as lower supply concerns, demand growth optimism and dollar weakness combined boosted prices for the week. Nickel prices at LME rallied by more than 4% followed by Copper, Zinc and Aluminium which gained by2% for the week.
Nickel prices at LME rose to the nine month high on demand from China and fear of lower supply of nickel ore from Southeast Asia region over lower shipments. Copper prices rose to the two years high at LME with prices closing above the resistance levels of $6645.
Copper prices may continue to trade higher in the medium term on expectations of lower supplies estimates from world's top miners and demand recovery expectations from US and China over positive economic data. We expect Copper prices to trade higher with resistance at$6800/6950 per tonne. At MCX, Copper September contract has important resistance at Rs. 530 and support at Rs. 517 for short term.