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Informist, Tuesday, Oct. 8, 2024

By Ashutosh Pati

MUMBAI – Futures contracts of all base metals on the Multi Commodity Exchange of India edged lower Tuesday, tracking losses on the London Metal Exchange, as China's top economic planner did not announce any further economic measures to boost the economy, analysts said. Sentiment was also hurt by market participants trimming bets of an interest rate cut by the US Federal Reserve following a blowout US September non-farm payrolls data and liquidation of long positions by commodity trading advisers.

According to Fed fund futures, market participants now expect interest rates in the US to be cut by only 25 basis points in both November and December. 

At a briefing by China's National Development and Reform Commission on Tuesday, no fresh stimulus measures were announced, which led to a sharp sell-off in base metals. The commission merely expressed its conviction that economic development was stable and sustainable. "This came as a rude awakening and shows once again how thin the air is after the recent rally," Commerzbank said in a note. 

"The world’s biggest consumer of metals (China), has been a drag on metals demand for more than two years. A broad economic slowdown and, in particular, the crisis in the property sector has seen copper and other industrial metals prices slump," ING Economics said in a research note.

For further cues, investors will await a speech by Federal Open Market Committee member Raphael Bostic later on Tuesday. They will also watch out for minutes of the Federal Open Market Committee's September meeting on Wednesday and the US consumer price index on Thursday.

ALUMINIUM prices fell, taking cues from LME, due to concerns about demand. Traders paring their long positions on the domestic bourse also hurt prices. 

COPPER prices slipped due to lack of fresh stimulus announcements from China and selling by commodity trading advisers. Prices of the metal fell to a fresh 10-day low on MCX because of a rebound in the dollar and traders reducing their long positions. 

At 2025 IST, on the MCX, the October futures contracts of:

- Aluminium was at INR 235.35 per kg, down 3%

- Copper was at INR 835.85 per kg, down 2.1% 

- LEAD was at INR 182.60 per kg, down 1.9% 

- ZINC was at INR 281.60 per kg, down 2.3%

Trading levels for the day on the MCX:

- Aluminium contract seen at INR 229.50-INR 242.70 

- Copper contract seen at INR 824.60-INR 856.80 

- Lead contract seen at INR 179.80-INR 186.60 

- Zinc contract seen at INR 275.50-INR 290.60

End

US$1 = INR 83.96

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

Edited by Avishek Dutta

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