Base metals Weekly report Mar 10th 08

Weekly C.week Prev week C.week Prev week (29 feb)

Inventory
data
P. Week C.week Diff Warrants C.Warrants C. warrants Cancratio Canc ratio Trend
Copper 144850 134275 -10575 105500 28775 31175 0.27 0.28 slight neg
Aluminium 948575 943175 -5400 906450 36725 34950 0.04 0.038 Positive
Zinc 123250 122975 -275 117625 5350 3350 0.05 0.028 Positive
Nickel 47868 47448 -420 46968 480 456 0.01 0.01 neutral
Lead 45375 46050 675 45525 525 900 0.01 0.02 negative
C.Warrants-Cancelled warrants ,c. Week –Current week

Comparison of Spot and future prices:

Future Mar Spot C.wee P. Week

k
07- 29- Diff 07- 29- Diff Contan Backwarda Contango Backwarda Trend
Mar Feb Mar Feb go tion tion
Copper 8560 8430 130 8660 8502 158 -100 -72 slight neg
Aluminiu 3211 3106 105 3175 3070 105 36 36 Positive
m
Zinc 2670 2740 -70 2640 2721 -81 30 19 Positive
Nickel 3340 3150 190 3320 3132 187 200 175 Neutral
0 0 0 0 5 5
Lead 3140 3330 - 3160 3335 - -20 Negative
190 175

US Economic indicator preview:

Date Time Events Actual Consensus Previous

03-Mar 15:00 ISM Manufacturing(Feb) 48.3 49 50.7 Dropped to 5 yrs low.Manuf
accts for 12% of the US
economy

05-Mar 15:00 Factory orders(Feb) -2.50% -2.50% 2.30% Declined 2.5% in Jan is
indicating slowing of US
economy

05-Mar 13:15 ADP employment change (23)K 20k 130k Showing weakness in
employment

05-Mar 15:00 ISM Non manufacturing(Feb) 49.3 47 44.6 Up compared to prev mnth
but less than 50 shows
contraction
 06-Mar 15:00 Mortage deliquincies(4Q Feb) 5.82% 5.59% Rose the most in two
decades as falling home
prices continue to drive
foreclosure

07-Mar 13:30 Change in NFP(Feb) (-)63k 30K (-)17k Payrolls lose 63k in feb 2nd
st decline shows economy
is in recession

07-Mar 13:30 Unemployment rate(Feb) 4.80% 5% 4.90%

Market overview

All base metals ended in positive territory last week except Lead ,supported by weak dollar and
production problem due to power crisis in various countries especially china,

US dollar declined to lower level in previous week against most of major currencies. Economic data
released in prev week did not provide comfort. Housing foreclosures jumped to a new high in the fourth
quarter shows that households are facing a rapidly -eroding employment picture. Non farm payrolls
dropped by 63k in feb second consecutive monthly loss .Both ISM manufacturing and non manufacturing
below 50 shows economy is in contraction phase. The data released shows that US economy is in trouble
and further rate cut is expected in the market.

Copper gained 1.5% this week supported by weak dollar, lower inventories, higher demand from Asia and
lower supplies.

Zinc declined USD 70 to $2670 this week. Xstrata Plc suspended a zinc plant at its mount isa mine complex
in Australia after a worker was killed .Mount Isa produced 226529 tons of zinc in concentrate last year.

Lead declined 5.7% this week lowest since feb 19th. Western Mining Co., China's second- largest producer
of lead concentrate, intends to build lead and zinc processing plants in Xiangfan city, Hubei province

The company plans to produce 60,000 to 70,000 tons of lead in concentrate by 2010.

Aluminum rose 3.3% in this week supported by global declining stockpiles monitered by LME.

Key data and events for Next week

Date Time(GMT) Events Consensus Previous

.13-Mar 12:30 Retail sales(Feb) 0.20% 0.30%

13-Mar 12:30 Intial jobless claim 355 351
14-Mar 12:30 CPI MOM(Feb) 0.30% 0.40%
14-Mar 12:30 Core CPI 0.20% 0.30%
 Retail sales are expected to cool in feb due to increasing fuel costs eroded American’s buying power

Another important data to be watched is inflation data(CPI) to be released on Friday.

Inflation are expected to ease lightly in Feb compared to previous month. But it is a big concern for Fed as
crude oil price rise to record of $106.54 a barrel last week. A weakening job market and rising gasoline
costs are hurting consumer confidence and spending, increasing the odds the economy is already in a
recession. So US dollar will show a slight weakness next week due to weakness in US economy will increase
the odds of further rate cut.

Technical’s:

Scrip Hi Low Close RSI MACD R1 R2 R3 S1 S2 S3

CU 353.9 333.8 346.7 Near OB Above zero 354 359 365 344.5 341 335 Neutral
apr 08
Al 130.3 121.9 129.55 OB OB 131.7 134 140 127.5 125.5 121.9 Slightly
mar08 positive
Zn 116.8 105.8 107.5 Towards OS above zero 110 112 116 103 99 97 Slighly
mar08 and showing weak
Showing weakness trading
selling below
pressure 200 day
MA
Pb 140.7 123.7 125.95 weakness weakness 128.5 132.5 140.8 123.7 117.4 108.2 Bearish
mar
08
Ni 1366 1259 1349.5 OB OB 1366 1417 1336 1288 1259 Neutral
mar08

Note :
Cu-Copper ,Ni –Nickel ,Pb –Lead,Zn-Zinc ,Al-Aluminum
Rangarajan.H

9894703007

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