India Base Metals
Copper dn as LME stocks up, no stimulus from China
This story was originally published at 20:04 IST on 18 July 2024
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By Sandeep Sinha
MUMBAI – Prices of COPPER on the Multi Commodity Exchange of India fell today, tracking the London Metal Exchange, because no policy support was announced at the China Third Plenum. Sentiment in the red metal was also weighed down by the persistent rise in inventory at LME-registered warehouses.
"Base metals tumbled on reports that China did not announce any specific measures to 'actively expand domestic demand’. At the Third Plenum, Xi Jinping vowed high-quality development is the top mission and officials reaffirmed their determination to hit this year’s development goals, including an annual growth target of about 5%," Kotak Securities said in a note.
The copper stock at LME-accredited warehouses rose by 6,325 tn to 227,425 tn, the highest level since September 2021. The ongoing weakness in China’s property sector also hurt copper demand.
The sentiment in base metals was further hurt by weak economic data from the eurozone and strength in the dollar. Eurozone construction output fell 0.9% on month in May, according to a report by Eurostat. The construction sector is one of the biggest users of base metals.
At 1810 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was up 0.1% at 103.83. A stronger greenback makes dollar-denominated commodities expensive for holders of other currencies, denting demand.
Today, the European Central Bank kept its benchmark interest rate unchanged. The interest rate on the main refinancing operations, the marginal lending facility, and the deposit facility will remain unchanged at 4.25%, 4.50%, and 3.75%, respectively, the release said.
ALUMINIUM prices pared earlier gains and went into the red as traders increased their short positions on the domestic exchange.
LEAD contracts traded in the red, taking cues from the LME, due to a rise in stocks by 625 tn in exchange warehouses.
ZINC contracts traded lower as market participants increased their short positions on the MCX.
* At 1810 IST, on the MCX, the July contract of:
–Aluminium was at 222.40 rupees a kg, down 0.1%
–Copper was at 827.75 rupees a kg, down 1.5%
–Lead was at 188.85 rupees a kg, down 0.2%
–Zinc was at 265.75 rupees a kg, down 0.4%
* Outlook for the evening session on the MCX:
–Aluminium contract seen at 219.80-227.70 rupees
–Copper seen at 815.60-838.90 rupees
–Lead seen at 186.90-190.20 rupees
–Zinc seen at 261.30-272.10 rupees
End
US$1 = 83.65 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Rajeev Pai
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