India Base Metals
All up on weaker dollar; Powell's speech in focus
This story was originally published at 20:43 IST on 23 August 2024
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By Sandeep Sinha
MUMBAI – Futures contracts of all base metals rose on the Multi Commodity Exchange of India and London Metal Exchange as the dollar weakened ahead of Federal Reserve Chair Jerome Powell’s speech at Jackson Hole later in the day. The positive sentiment was supported by a fall in stocks at LME-registered warehouses and improved risk sentiment.
Stocks of ALUMINIUM in LME warehouses declined by 3,500 tn to 870,950 tn and stocks of COPPER fell by 4,125 tn to 315,575 tn. LEAD stocks declined by 1,575 tn to 180,900 tn and ZINC stocks by 800 tn to 256,050 tn.
At 1830 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was down 0.1% at 101.47. A weaker greenback makes dollar-denominated commodities, such as base metals, cheaper for holders of other currencies.
"We do not see any fundamental reason for a recovery rally in general... the economic situation in the most important sales markets remains weak," Barbara Lambrecht, commodity analyst at Commerzbank AG, said in a note to clients. "We are therefore skeptical that the recovery rally (base metals) will continue in the short term."
Aluminium prices rose because of short-covering of positions by traders on the domestic exchange.
Copper prices gained on expectations of improved demand and a weaker dollar.
Lead contracts traded higher because of a supply shortage and a fall in LME stocks.
Zinc contracts traded higher as market participants increased their long positions.
At 1900 IST, on the MCX, the August futures contract of:
–Aluminium was at 227.75 rupees a kg, up 1.4%
–Copper was at 796.60 rupees a kg, up 0.3%
–Lead was at 189.80 rupees a kg, up 0.3%
–Zinc was at 266.25 rupees a kg, up 0.4%
Outlook for the evening session on the MCX:
–Aluminium contract seen at 224.00-230.00 rupees
–Copper seen at 792.00-803.00 rupees
–Lead seen at 187.00-191.00 rupees
–Zinc seen at 264.00-269.50 rupees
End
US$1 = 83.89 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Rajeev Pai
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