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Informist, Wednesday, Aug 28, 2024

By Ashutosh Pati

MUMBAI – Future contracts of all base metals fell today on the Multi Commodity Exchange of India, tracking the London Metal Exchange, due to a firm dollar index. A stronger dollar index makes dollar-denominated commodities expensive for other currency holders, weighing on prices. 

At 1810 IST, the dollar index, which measures the strength of the greenback against a basket of major currencies, was up 0.6% at 101.13.

A recovery in the dollar index triggered profit booking in base metals after 3–4 days of rally, said Ajay Kedia, director of Kedia Advisory. The dollar index fell to a 13-month low on Tuesday to 100.51. 

However, rate cut hopes by the US Federal Reserve in September are likely to limit the downside in base metal prices, analysts said. Lower interest rates will reduce the borrowing cost, increasing the demand for base metals. "The overall sentiment remains positive as this (current price) is a temporary low," Kedia said. 

Investors now await the US Core Personal Consumption Expenditures Price Index, the preferred inflation gauge of the US Federal Reserve, due on Friday.

After rising 7.5% last week on the LME, ALUMINIUM prices fell today due to a strong dollar index, analysts said. However, lower stocks of alumina are likely to restrict the downside in prices as alumina is the intermediate product between bauxite and refined aluminium. 

COPPER prices fell amid concern about demand after BHP, the world's second-biggest copper supplier, cut its forecast for demand in China this year, according to various media reports.

LEAD prices fell, taking cues from the LME, as inventories at LME-registered warehouses rose by 4,200 tn to 185,100 tn.

At 1800 IST, on the MCX, the September futures contract of :

- Aluminium was at 229.8 rupees per kg, down 1.6% 

- Copper was at 807.05 rupees per kg, down 1.5%

- Lead was at 187.45 rupees per kg, down 0.8%

- ZINC was at 266.65 rupees per kg, down 1.7%

Trading levels for the day on the MCX :

- Aluminium contract seen at 228.70-233.80 rupees

- Copper contract seen at 799.00-815.00 rupees

- Lead contract seen at 186.20-189.70 rupees

- Zinc contract seen at 265.50-270.20 rupees

End

US$1 = 83.95 rupees

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Akul Nishant Akhoury

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