When you look at the month of August, it is perhaps going to end in the negative. The previous week actually saw a very sharp decline for many of the base metal prices.

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Copper prices and nickel declined by nearly 6 percent. Tin, which had been hitting all-time highs for most part of last fortnight also declined by nearly 11 percent and aluminium and zinc fell by 2 to 3 percent as well.

Markets did see a decline as the US Dollar Index traded at close to nine months high. The economic data from US and China continued to lag in the last couple of weeks and worries about rising COVID cases have been plaguing as well. The inventories for many of these metals have been on the rise in Shanghai and on LME.

Again, July and August usually are weak seasonal periods, so almost everything worked against many of these metal prices.

Today we have seen some opportunity buying but after 6 to 8 percent of decline in the previous week, there are a couple of metals which have seen 0.50-2.50 percent gains, and these are clearly, copper and nickel.

Copper, because it has concerns about supplies coming in from Chile, especially after Escondida has given a huge bumper bonus to its workers. The other mines in Chile are under pressure now, if they cannot cough up so much of an amount then they are perhaps headed for strikes.

Chile produces nearly 25 percent of the world’s copper. The EV demand expectations also have been supporting copper.

The other metal which has seen buying interest today and is nearly 2 percent up on LME and Indian markets is nickel. Here too, supply concerns are coming in. Nickel prices declined by nearly 7 percent in the previous week, but much buying is what we are seeing right now. This is again on backorder for tight refined and concentrated nickel.

There have been some supportive reports coming in from Macquarie that says that nearly 15 percent of an increase in demand is what they are expecting this year. There is also a report from Wood Mackenzie saying that 65 percent of an increase in EV demand is what is expected for nickel by 2030.

So, these are the two metals that most banks, Wall Street brokerages also believe that one could perhaps continue to buy on dips, the other metals could continue to lag.

(Edited by : Dipika)