India Base Metals
Down on fading hope of additional stimulus from China
This story was originally published at 19:24 IST on 9 October 2024
Register to read our real-time news.Informist, Wednesday, Oct. 9, 2024
By Ashutosh Pati
MUMBAI– Futures contracts of all base metals fell on the Multi Commodity Exchange of India, tracking losses on the London Metal Exchange because of fading optimism related to China's stimulus measures. The sentiment was also hurt by a firm dollar, which makes commodities priced in the greenback expensive for holders of other currencies.
"We think that the recent stimulus measures (announced last month) still lack detail, and we struggle to find an additional demand growth driver for industrial metals in the measures announced so far," ING Economics said in a note. Any sustained pickup in metal prices depends on the strength and speed of the rollout of these measures.
At 1751 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was up 0.2% at 102.68. The dollar recovered as recent strong economic data in the US reduced the expectation of an aggressive rate cut by the US Federal Reserve at its forthcoming meeting.
For further cues, investors await the minutes of the Federal Open Market Committee's September meeting later on Wednesday. They will also watch out for the US CPI on Thursday and the US Producer Price Index on Friday.
Investors will also look forward to a press briefing on fiscal policy by China's Finance Minister Lan Fo'an on Oct. 12, according to various media reports. China is the world's biggest producer and consumer of non-ferrous metals and any further stimulus announcement will spur demand for metals and support prices.
COPPER prices fell, taking cues from LME, because of strength in the dollar and weak demand. Mine expansions in the Democratic Republic of Congo and Chile are driving global copper stocks up, Dow Jones cited BMI, a unit of Fitch Solutions, in a note. Refined copper production is likely to expand 3.6% to 27.5 million tonnes in 2024, supported by expansions at Congo's Kamoa-Kakula mine and the Quebrada Blanca project in Chile.
At 1754 IST, on the MCX, the October futures contracts of:
- ALUMINIUM was at INR 232.5 per kg, down 1%
- COPPER was at INR 827.20 per kg, down 0.9%
- LEAD was at INR 181.65 per kg, down 0.9%
- ZINC was at INR 277.50 per kg, down 1.1%
Trading levels for the day on the MCX:
- Aluminium contract seen at INR 227.30-INR 239.20
- Copper contract seen at INR 815.00-INR 842.00
- Lead contract seen at INR 180.00-INR 184.55
- Zinc contract seen at INR 275.00-INR 285.95
End
US$1 = INR 83.96
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Deepshikha Bhardwaj
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