Monthly Outlook for Base Metals (May 2009): Nirmal Bang

Monthly Outlook for Base Metals (May 2009): Nirmal BangBase Metals: Most of the metals settled in the negative territory following the outbreak of Swine flu across the globe, an add-on to the deteriorating economic scenario.

The overall scenario turned gloomy on back of reports released by various international groups indicating dwindling demand and cut down in production. Lead took the highest hit, shedding 13.71% during the fortnight, followed by copper, which lost 8.82% during the same period.

Monthly Outlook: Base metals have witnessed a healthy correction after a rally. We are not very bearish on base metals complex. We are bullish on zinc as production cuts have been quite severe, which might lead to further upside in zinc by 8-10%. Aluminium is likely to move up by 4-5% in the next fortnight.

Since the last fortnight we have been witnessing a draw in LME warehouse stocks of copper and prices have corrected by 8%. We don't expect prices to breach previous highs. However, we recommend profit booking at Rs 241/kg level