MCX Commodity Report

CopperThe inventories of Copper in China continued to move higher as the prices of London Metal was chopped by profit booking and fears of lower GDP growth in the country. China inventories of Copper showed a sharp jump for the week ending 12 October 2012. Shanghai weekly inventory of Copper increased by 18967 metric tones or 11.7% to 181514 metric tonnes on 12 October 2012.This was much more on the expected lines as China is trying hard to increase its local currency versus the Dollar in an attempt to ease inflation in commodities and sourcing it at a cheaper rate.

Meanwhile, ICSG predicted a deficit in Copper for 2012 but said that the rising world supplies and ramp up of production will result in the metal turning into a surplus next year. A supply deficit of 400000 tonnes is estimated in Copper in 2012. International Monetary Fund (IMF) said that the worries of global financial instability were higher due to ongoing European crisis. Higher borrowing costs and declining market confidence was worrisome. This created pressure on the metals during the week.

World Bank slashed its forecast for Asia Pacific economies to 7.2% from earlier forecast of 7.6%. China forecast has been cut to 7.7% this year compared to 8.2% in earlier forecast of May.

Non ferrous metals were trading on a weak note on expectations of dejection from Chinese trade data due to be released on Saturday. The inflation numbers from China will be released on Monday next week. Many investors still opted to stay on the sidelines before the Chinese trade data. China is a major consumer of metals in the world therefore caution before the trade data is quite high.

Today, Shanghai weekly inventory of Copper increased by 18967 metric tonnes or 11.7% to 181514 metric tonnes on 12 October 2012. London Copper inventories declined marginally by 3630 tonnes on Friday to 215900 metric tonnes. LME Copper three month forwards were trading at $ 8164 per tonne, as against $ 8212 per tonne on Thursday.