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Informist, Friday, Oct. 18, 2024

By Ashutosh Pati

MUMBAI – Futures contracts of all base metals on the Multi Commodity Exchange of India and the London Metal Exchange rose Friday because of better than expected economic data from China. The positive sentiment was also boosted by a weak dollar, which makes commodities priced in the greenback cheaper for holders of other currencies.

At 1558 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was down 0.1% at 103.66.

Industrial production in China rose 5.4% on year in September, the National Bureau of Statistics of China said Friday. The data beat expectations of a 4.5% rise in a Reuters poll of 40 analysts. Retail sales of consumer goods in September rose 3.2% on year, against expectations of 2.5% growth. The country's GDP expanded 4.6% on year in the third quarter of 2024, while economists polled by Reuters had expected GDP to have grown 4.5% on year. The growth, however, was below the previous quarter's 4.7% print. China is the biggest producer and consumer of non-ferrous metals and positive economic data from the country could boost demand for metals.

However, industrial metals are likely to see a pullback in the short term, as China failed to deliver any meaningful stimulus measures to help boost economic growth, ANZ Research said in a report. China's property market, unsurprisingly, remains the biggest drag on the country's growth, ING Economics said in a note.

On Thursday, the Chinese minister of housing and urban-rural development, Ni Hong, pledged to expand a "whitelist" of housing projects eligible for bank financing and increase bank spending for such development to 4 trillion yuan ($561.8 billion).

China's latest round of property sector stimulus would help the housing market rebound in the next one to two months, but the longer-term impact remains unclear, Dow Jones cited BNP Paribas analysts as saying in a note. China's housing ministry has not set a specific timeline for the plan, the impact of which could be limited if it takes years to carry out, analysts said.

COPPER prices rose due to positive economic data from China. Prices also got support as stocks at LME-registered warehouses fell by 3,225 tonnes. Additionally, challenges in copper mine supply are likely to keep the concentrate market tight and reduce the output of refined copper, particularly in China, ANZ Research said in a report.

ALUMINIUM prices rose due to better than expected economic data from China. Sentiment was boosted as inventories at LME-registered warehouses fell by 2,500 tonnes.  

At 1558 IST, on the MCX, the October futures contracts of:

-Aluminium was at INR 236.90 per kg, up 0.7%

-Copper was at INR 821.25 per kg, up 0.9% 

-LEAD was at INR 182.90 per kg, up 0.2% 

-ZINC was at INR 283.40 per kg, up 0.5%

Trading levels for the day on the MCX:

-Aluminium contract seen at INR 231.10-INR 239.80 

-Copper contract seen at INR 808.70-INR 831.20 

-Lead contract seen at INR 180.10-INR 184.90

-Zinc contract seen at INR 275.10-INR 289.40

End

US$1 = INR 84.07

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

Edited by Avishek Dutta

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