Base Metal Updates

The 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 tonnes 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.