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Informist, Tuesday, Sep 3, 2024

By Ashutosh Pati

MUMBAI – Futures contracts of all base metals fell today on the Multi Commodity Exchange of India, tracking prices on the London Metal Exchange because of a firm dollar and worries about demand in China. A stronger greenback makes dollar-denominated commodities, such as base metals, expensive for holders of other currencies.

At 1550 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was 101.80, up 0.2%. 

Traders were concerned about demand for copper in China as the country's property sector crisis continues. The sector is one of the biggest users of base metals.

"Base metals continue to fall following the release of disappointing Chinese economic data. The disappointing Chinese data shows China's efforts to address the real estate downturn and boost economic activity have not been successful," Kotak Securities said in a note.

Traders now await the Institute for Supply Management and S&P Global US manufacturing purchasing managers' index, due later today, and the US nonfarm payrolls data that will be released on Friday.

However, a further downside in non-ferrous metals was cushioned by a fall in stocks at LME-registered warehouses. LME stocks of aluminium fell by 3,500 tn to 834,925 tn, copper stocks by 2,850 tn to 317,800 tn, lead by 1,500 tn to 177,875, and zinc stocks by 1,900 tn to 241,325 tn.

ALUMINIUM prices fell as traders increased their short positions on the domestic exchange.

COPPER prices fell because of demand concerns and a firm dollar.

LEAD traded lower as market participants increased their short positions. The sentiment was also dampened as the price was trading below key averages on the daily chart.

ZINC contracts fell due to weakness in steel prices, as the metal is used for galvanisation. China produced 4.5% higher zinc in the first seven months of 2024 as compared to last year.

At 1623 IST, on the MCX, the September contract of:

- Aluminium was at 221.70 rupees per kg, down 0.5%

- Copper was at 786.65 rupees per kg, down 1.8%

- Zinc was at 263.35 rupees per kg, down 0.6%

- Lead was at 183.25 rupees per kg, down 1.1%

Trading levels for the day on the MCX :

- Aluminium contract seen at 220-225 rupees

- Copper contract seen at 788–798 rupees

- Zinc contract seen at 260–266 rupees

- Lead contract seen at 183.50-187.00 rupees

End

US$1 = 83.97 rupees

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

Edited by Vidhi Verma

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