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Informist, Friday, Nov. 22, 2024

By Ashutosh Pati

MUMBAI - Futures contracts of all base metals fell on the Multi Commodity Exchange of India and the London Metal Exchange as the dollar extended gains for the third consecutive day. The sentiment was also hurt by uncertainty over demand from China, analysts said.

At 1555 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was up 0.6% at 107.64. A firm dollar makes commodities, such as base metals, priced in the greenback, expensive for buyers holding other currencies.

"Industrial metals have struggled in the wake of the US elections and the rising dollar, while disappointments over the strength of Chinese stimulus measures have also weighed to the downside," Dow Jones quoted BMI analysts as saying in a note.

The latest economic data from Europe also weighed on prices of base metals as the region is one of the major consumers. The S&P Global flash UK manufacturing purchasing managers' index fell to a nine-month low of 48.6 in November from 49.9 last month. The Hamburg Commercial Bank flash Eurozone manufacturing purchasing managers' index fell to 45.2 in November from 46.0 in October, marking a two-month low.

However, the downside in base metals was restricted due to a fall in inventories at warehouses monitored by the Shanghai Futures Exchange. Copper stocks fell by 10,229 tonnes on week to 120,236 tonnes and aluminium stocks fell by 1,827 tonnes to 231,854 tonnes. Zinc inventories fell by 4,521 tonnes on week to 86,140 tonnes and lead stocks fell sharply by 20,547 tonnes to 52,796 tonnes.

Investors await the US flash Manufacturing Purchasing Managers' Index and the flash Services Purchasing Managers' Index due later in the day for further cues.

COPPER prices fell, taking cues from the LME, due to a firm dollar. The global copper surplus widened to 359,000 tonnes in Jan-Sept from 42,000 in the corresponding period last year, the International Copper Study Group said in a report on Wednesday.

ALUMINIUM prices fell as global production of primary aluminium rose 3.5% on month in October to 6.22 million tonnes, data from the International Aluminium Institute showed.

At 1555 IST, on the MCX, the November futures contract of:

–Aluminium was at INR 245.25 a kg, down 0.1%

–Copper was at INR 820.10 a kg, down 0.5%

–LEAD was at INR 179.25 a kg, down 0.7%

–ZINC was at INR 278.45 a kg, down 0.8%

Trading levels for the day on the MCX:

-Aluminium contract seen at INR 239.40-251.60

-Copper contract seen at INR 808.00-839.00

-Lead contract seen at INR 177.50-182.50

-Zinc contract seen at INR 273.80-286.20

End

US$1 = INR 84.45

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

Edited by Vandana Hingorani

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