Last Updated : 24 January 2013 at 13:10 IST
MUMBAI (Commodity Online): With the operating conditions improving at the quickest pace in 2 years, China manufacturing expanded with preliminary PMI data providing a reading of 51.9, according to HSBC Flash China Manufacturing PMI for January. The data is in comparison to a reading of 51.5 in December.
But the development is in no way going to impact base matal prices nudging them to the upside except for zinc, it seems.
“In case of copper, the production is at record highs. Premiums have declined and demand is moderating.” said Kunal Shah, Head of Commodity Research at Nirmal Bang Commodities. He expects the prices to come down by 1.5% to 2% in the next 6-7 days.
Meanwhile, commenting on the Flash China Manufacturing PMI survey, Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC said:
“At 51.9, January’s HSBC China manufacturing PMI rose for the fifth consecutive month to the highest level in two-years, heralding a good start to the New Year. Thanks to the continuous gains in new business, manufacturers accelerated production by additional hiring and more purchases.”
“Despite the still tepid external demand, the domestic-driven restocking process is likely to add steam to China's ongoing recovery in the coming months.” he added.
Intra-day prospects
MCX copper dropped on Thursday morning as overall trading activity has been range bound and as market players later in the trading day, eyed a measure to temporarily increase the U.S. debt ceiling.
MCX copper February contract stayed almost flat and traded near 438.65 at 12.09 PM IST with minor change in price. While copper prices on the LME is down by 0.29% and INR depreciated by 0.40% the trading range of Copper prices on the MCX shrunk.
“Overall sentiments are looking sideways to negative. MCX Copper February contract is likely to find major support at 435 and resistance at 440. Sell on rise can be suggested for intra-day traders for copper futures.” said Amrita Mashar, Research Analyst, Commodity Online.
The HSBC Flash China Manufacturing Purchasing Managers’ Index (PMI) is published on a monthly basis approximately one week before final PMI data are released. The estimate is typically based on approximately 85%–90% of total PMI survey responses each month and is designed to provide an accurate indication of the final PMI data.
A reading of PMI above 50 signals expansion in the economy while below the same it signals contraction. Final January data are published on 1 February 2013.
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