Copper Rally Is All About Supply Side Weakness: Nirmal Bang Commodities | CNBC TV18
welcome back and joining us on the show
now is Kunal sha from Nal Bank Kunal hi
good to have you and uh you know the
dollar has seen a bit of a decline
trading below 106 and that’s given a
fresh life for many of these Metals
which had started to kind of consolidate
even see a bit of a profit taking and
the street now is waiting for the first
quarter GDP numbers and the PC data from
us ahead of that we’ve seen a bit of a
buying comeback in many of these I want
to start with copper trading at a
two-year highs where do you see the
prices move from here well uh the bull
running copper started with the all the
smelters in China cutting their
production and then after that we’ve
seen in last 15 days two mines cutting
their production so I think the rally of
copper right now is all about the supply
side weakness in the uh or Market copper
o Market uh the copper concentrate
Market is uh looking very tight right
now and that is causing the prices to
move up if you look at the premiums in
China the uh premiums is clearly
indicating that the demand is not
aggressively coming at this rate but
it’s a supply Side Story and with the
com combination of that we have rate
Cuts so expectation of rate cut so
everyone is waiting for bad data you saw
the US manufacturing PMI numbers
declining and immediately everything
went up so like you rightly said today
we have US GDP numbers tomorrow PC data
I don’t I’m not expecting any major
negative surprise in PC data but uh any
soft number us soft GDP number will
definitely cause dollar Index to weaken
and uh the again the expectation of rate
Cuts with build so I would broadly say
that uh mainly the major trigger point
will be US GDP data and on the basis of
that we are going to see uh another
Rally or downside my guess is from here
the upside is limited for the time being
I’m not expecting a major run up from
here in near term uh cons idation uh is
something what I’m expecting right now
and if you ask me uh 3 months four
months down the line what would be the
possible Trend that is definitely uh
looking pretty positive so broader Trend
Still Remains Contin uh strong but in
short term we may see some consolidation
to uh downward correction if the US data
is
positive not just copper because we’ve
seen gains in aluminum and zinc also
these are also trading at multi-on highs
the kind of runup euphoria that P seen
and copper seems to be spilling over to
other metals do you see an equal amount
of strength in these as well for a
broader longer term period aluminum also
because of the sanctions uh being put on
Russia I think uh aluminum will also
remain pretty tight as far as the uh
supply side is concerned going forward
uh and see the the major narrative right
now is uh rate Cuts whether it is going
to be delayed or whether it will come on
time that is one thing but there is one
thing is very clear that rate cuts are
coming maybe in June July August
September anywhere and if the rate cuts
are coming uh the monetary easing cycle
is beginning so that is always going to
be bullish from the macro point of view
so whichever metals are fundamentally
relatively strong like copper number one
strongest second will be aluminium third
will be zinc fourth will be led on MCX
that is how uh it is going to perform so
two metals relatively looks strong to me
fundamentally from the supply side is
copper and aluminum okay noted that so
that’s about the nonfer metals coming to
the ferris metals and we’ve seen good
amount of strength here too steel is
surging up I know is trading at a six we
highs here as well it is China which is
looking at stocking yet again there were
some positive statements about state
governments now looking to push the
pending projects in sense of
infrastructure that is where the steel
and ion or demand seems to be coming in
from uh yes so uh everyone has written
of China two months back no one was
saying that the Chinese real estate
market is weak uh Metro should not go up
and suddenly we see
China China stabilizing and the built up
of rate cut expectation these two are
the main drivers for Commodities right
now any commodity you name any commodity
and the major reason why everything is
ring right now is the main is uh
expectation of the uh change in the
monetary policy by by all the Western
Central Bankers that is the major issue
and second is uh China stabilization so
we’ve seen Chinese stock market also I
think have risen by more than 10% in
last one one and a half months so a
sense of stability in China coupled with
the macro factors like expectation of
rate cuts and third is the supply Side
Story going on in a lot of these Metals
so even feris for that matter you’ve
seen China steel production is declining
right now and that is basically
lifting the prices of Steel and if you
look at even look at irr also irr prices
are have been have ried by almost 15% so
stronger steel and iron prices will also
lead to higher uh Ferris metals also in
India also Ferris Metals should do well
going forward uh Stronger demand
stronger growth expectation uh and
curbing uh Imports so if if right now
we’ve seen the Chinese import if China’s
production is coming down then the
Chinese Imports will be also Tak care of
so even feris Metals looks quite
positive going forward a final question
then on precious metal
prices Kunal and we have seen prices see
a bit of a profit taking from its Highs
but are these current levels do you
think this is a good time to start
accumulating or one should wait for
further
dips uh gold about $23 $50 doesn’t look
bullish in shorter term uh and I don’t
recommend to go long fresh long at these
levels uh everyone after we’ve seen a
rally from 2, 2,400 everyone has
upgraded their target to 26 2800 $3,000
but I don’t think so this is not the
time you know you aggressively buy gold
at these levels most of the positive
fundamentals are already priced in so in
a shorter term I’m not expecting any
major Rally from here uh it requires
more trigger uh any major deterioration
in the geop geopolitical landscape or
something like that so about 2350 to
2400 these are the levels you know I’m
not bullish right now uh as per me in
shorter term it can decline it can again
retest 2322 90 and then perhaps after
that you see some stability and it will
go up but in near term I’m not very
bullish on
gold okay all right Kunal as well as
Manisha thanks very much for bringing us
that update with regards to the
Commodities well for the equities it’s
the
Copper rally is all about supply side weakness with the Copper ore market looking tight, says Kunal Shah of Nirmal Bang Commodities. Tells Manisha Gupta that he won’t recommend fresh longs in gold as levels above $2350-2400 are not attractive to buy gold.
#copper #gold #copperprice #goldprice #commodityprice #commodities #commoditymarket #cnbctv18 #businessnews #businessnewstoday #businessnewsinenglish #sharemarkettoday
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