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Informist, Monday, Nov. 18, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of LEAD fell on the Multi Commodity Exchange of India despite positive cues from the London Metal Exchange, because of a sharp rise in stocks at LME-accredited warehouses and concerns about demand. The sentiment was further hurt by disappointment over China's stimulus package.

LME stocks of lead surged by 49,500 tonnes to 234,725 tonnes and zinc stocks rose by 11,050 tonnes to 259,500 tonnes. China's factory output growth came in at 5.3% in October, lower than analysts' expectation of 5.6% polled by Reuters.

"The world’s biggest metals importer (China) unveiled a $1.4-billion programme to restructure local government debt. However, it stopped short of delivering new stimulus," Daniel Hynes, senior commodity strategist at ANZ Research, said in a note.

However, the downside in non-ferrous metals was limited due to the weakness in the dollar. China's finance ministry on Friday said it would cancel the export tax rebate on aluminium products from Dec. 1. The removal of the rebate will make Chinese aluminium expensive in the international market and lead to a cut in export volumes. The ministry lowered the export tax rebate on copper to 9% from 13%.

At 1550 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was down 0.1% at 106.59. A weaker greenback makes dollar-denominated commodities, such as base metals, cheaper for holders of other currencies.

ALUMINIUM prices fell as traders raised their short positions on the domestic exchange. The sentiment was further dented by profit-taking by traders after a sharp rally on Friday and rising supply from China.

COPPER prices rose as market participants increased their long positions on the MCX. A fall of 350 tonnes in stocks at LME-registered warehouses also supported the prices.

ZINC contracts traded a tad higher because of weakness in the dollar. However, the upside was restricted due to a rise in LME inventory.

At 1550 IST, on the MCX, the November futures contract of:

–Aluminium was at INR 241.0 a kg, down 0.7%

–Copper was at INR 798.80 a kg, up 0.5%

–Lead was at INR 178.25 a kg, down 0.2%

–Zinc was at INR 277.10 a kg, up 0.1%

Trading levels for the day on the MCX:

-Aluminium contract seen at INR 235.30-244.40

-Copper contract seen at INR 789.0-807.0

-Lead contract seen at INR 177.0-180.0

-Zinc contract seen at INR 273.0-283.0

End

US$1 = INR 84.39

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

Edited by Avishek Dutta

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