Base Metals Trading Strategy and Commodity Market Update: Nirmal Bang

Base MetalsA slumping U. S. dollar and signs the global economy was recovering helped ignite a broad-based rally in the industrial metals complex on Tuesday, buoying the price of copper in London back up over the $6,000-a-tonne level.

Copper, used in power and construction, has surged 96 percent so far this year, largely supported by hefty buying by the Chinese Reserves Bureau and Chinese investors.

Japan's top six copper smelters are planning to increase output cautiously in the next six months as a gradual recovery in domestic demand helps offset slower Chinese buying, but several will stop short of restoring full production.

Russian aluminium and nickel exports fell in the first eight months of 2009 from year-ago levels due to weak demand caused by the global financial crisis, while copper exports rose, customs data showed on Tuesday. The government in February lifted a 5 percent export tariff on copper cathodes and nickel in an attempt to help Russia's largest producer, Norilsk Nickel, and other producers of the two metals.

Pan Pacific Copper Co Ltd, Japan's top copper smelter, plans to produce 286,000 tonnes of copper from October to March, down 1.6 percent from the same period a year earlier, the company said in a news release on Tuesday.

Despite weakness in dollar and rally in other commodities, base metals remained subdued, indicating some weakness. We expect sideways movement on lack of Chinese participation. Stronger GDP data from Euro zone may trigger some upside.