Last week, base metals rose thanks to a weaker dollar, optimism about potential US interest rate cuts, and technical factors. In contrast, other metals remained stagnant due to weak fundamentals and rising inventories. Global industrial indicators worsened, with manufacturing PMIs continuing to contract in China, Europe, and the US. Additionally, service sector PMIs declined in the US and China, the largest global markets. Overall, metals ended in positive territory, with copper rising by 4%, zinc by 3.4%, aluminium by 1.6%, and lead gaining 0.26%.
Copper: At the start of the week, copper prices are expected to rise $10500 due to optimism about potential Chinese stimulus and new highs in US shares, driven by anticipated Federal Reserve interest rate cuts. The focus will be on the Third Plenum meeting in mid-July. However, gains might be limited by weak physical demand from China amid a prolonged property crisis and high prices. In terms of MCX July Copper prices, anticipate to trade within a broader consolidation range with support levels at ₹846/835 and resistance levels at ₹892/923.
Aluminium: Aluminum prices remain strong due to soft economic data in key manufacturing economies, which has increased expectations of US government support and improved financing conditions for factories in emerging Asian markets. In China, weak domestic demand has further fueled hopes of stimulus ahead of Beijing’s Third Plenum. In terms of MCX July Aluminum prices, anticipate to trade within a broader consolidation range with support levels at ₹229/225 and resistance levels at ₹236/241.
Zinc: The zinc prices expected to trade positive, supported by supply disruptions and optimism over Chinese economic stimulus. Treatment charges for zinc concentrate are at their lowest since 2016, reflecting a tighter market. According to the ILZSG, the global zinc surplus narrowed to 22,100 metric tons in April from 70,100 tons in March. In terms of MCX July Zinc prices, anticipate trading within a broader consolidation range of ₹266/258 support level to ₹277/285 resistance levels.
This week, the focus will be on the US release of CPI and PPI data for June, as well as Federal Reserve Chair Powell’s semiannual testimony on monetary policy at the Senate Banking Committee. In China, key releases will include the inflation rate, PPI, new yuan loans, and trade balance data.
