As predicted by this report, the base metals complex suffered another bout of selling (with the exception of Nickel) after a small corrective rally. The floor was provided by physical demand. However, it appears that trade is not ruling out further lows. The flagship copper contract is flirting with a technical break-out on the downside and if it fails to close convincingly above 1575 dollars/ton this week, then it is vulnerable to further whacking. Rest of the metals are likely to follow copper, provided there are no fresh developments on the supply side. As always, economic numbers expected from US this week will be closely monitored by the market.While we remain no too friendly short term towards base metals, unless fresh positive news surprises all, but we strongly feel that any further losses in the region of 2-5 percent in base metals would present long term buying opportunities. After all we are all optimistic on US Economic recovery, but may differ on the timing.
NSTL
