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Informist, Tuesday, Nov. 26, 2024

By Ashutosh Pati

MUMBAI – Futures contracts of most base metals fell Tuesday on the Multi Commodity Exchange of India, tracking a fall on the London Metal Exchange, as US President-elect Donald Trump vowed to impose tariffs on imports from China, Mexico, and Canada from day one of his presidency.

Trump said an additional 10% tariff would be levied on China and 25% on all goods coming from Mexico and Canada. Base metals have been under pressure since Trump's presidential win due to the potential for a trade war and weak demand outlook in China, ING Economics said in a report.

"The market will be bearish in the near term as the pricing in of a risk premium for tariffs on China likely still has further to go," Dow Jones quoted analysts at JP Morgan as saying in a note. However, the medium-term outlook is more bullish as a fresh round of stimulus is expected from China, analysts said.

Further downside in base metal prices was restricted by a fall in stocks at warehouses registered with the LME. ALUMINIUM inventories fell by 2,525 tonnes to 703,475 tonnes, and COPPER stocks fell by 1,500 tonnes to 269,475 tonnes. LEAD stocks fell by 625 tonnes to 274,175 tonnes.

Depleting inventories on the Shanghai Futures Exchange and the LME and improved premiums along with treatment charges could provide some support to base metals, Kotak Securities said in a note. For further cues, investors await the minutes of the US Federal Open Market Committee's November meeting and the US Core Personal Consumption Expenditures Price Index due Wednesday.

ZINC prices rose, taking cues from the LME, as inventories fell by 2,575 tonnes to 255,625 tonnes. Prices got support from higher steel prices as the metal is used for galvanisation.

At 1551 IST, on the MCX, the December futures contract of:

–Aluminium was at INR 243.45 a kg, down 0.5%

–Copper was at INR 806.40 a kg, down 0.1%

–Lead was at INR 179.40 a kg, down 0.1%

–Zinc was at INR 284.50 a kg, up 1.4%

Trading levels for the day on the MCX:

-Aluminium contract seen at INR 238.70-248.70

-Copper contract seen at INR 796.00-819.00

-Lead contract seen at INR 177.55-181.15

-Zinc contract seen at INR 276.50-287.10

End

US$1 = INR 84.32

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

Edited by Rajeev Pai

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