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Published on 19/09/2022 10:49:01 AM | Source: Angel One Ltd

Weekly Basemetal Update : We expect copper to trade lower towards 643 levels by Mr. Saish Sandeep Sawant Dessai, Angel One

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 "Weekly Base Metal Report" by Mr. Saish Sandeep Sawant Dessai, Research Associate- Base Metals, Angel One Ltd

The industrial metals pack ended the recent week on a negative note, after ending the prior week on a positive note, except for Zinc, which extended the weakness for the second straight week.

Following the startling CPI statistics, the dollar strengthened even further, recording its highest daily percentage gain since 2020 causing worries that the Federal Reserve will raise interest rates more aggressively, which might hurt the demand for metals.

When the dollar is strong, commodities priced in dollars become more expensive for holders of other currencies. The production of the energy-intensive metal aluminum has slowed down as Europe struggles with rising power prices, and roughly half of the EU's capacity to produce aluminum and zinc has already been shut down.

Other industrial metals, however, are still under pressure due to concerns that a global economic downturn will cut demand for metals. On the other hand, the largest copper deposit in the world, Chile's Escondida mine, where the workers union is supporting a partial strike and has threatened a complete work stoppage.

Outlook: We expect copper to trade lower towards 643 levels, a break of which could prompt the price to move lower to 633 levels.

 

 

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