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Informist, Monday, Dec. 2, 2024

By Ashutosh Pati

MUMBAI – Futures contracts of ALUMINIUM and ZINC fell on the Multi Commodity Exchange of India, tracking losses on the London Metal Exchange because of a firm dollar which makes commodities priced in the greenback expensive for buyers holding other currencies. The sentiment was also weighed down by concerns about US trade tariffs on imports from China, analysts said.

At 1614 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was up 0.3% at 106.31.

Aluminium prices also fell because of weak risk sentiment and traders increasing their bearish positions on the domestic exchange and zinc contracts traded lower as traders booked profit as the metal surged nearly 3% last week.

The Caixin China General Manufacturing Purchasing Managers’ Index rose to 51.5 in November from 50.3 in October, signalling conditions in the manufacturing sector improved for a second straight month. The pace of growth was the fastest since June. "Prices on the base metals markets have been treading water since mid-November. The players are waiting for new impetus from China," ING Economics said in a report.

However, further downside in base metal prices was limited as inventories of most metals decreased at warehouses monitored by the Shanghai Futures Exchange. Copper stocks fell 11,461 tonnes on week to 108,775 tonnes and aluminium inventories fell 4,053 tonnes to 227,801 tonnes. Zinc inventories decreased by 9,156 tonnes on week to 76,984 tonnes and lead stocks fell 4,209 tonnes to 48,587 tonnes.

For further cues, investors await the US Institute for Supply Management's Manufacturing Purchasing Managers' Index, S&P Global US Manufacturing Purchasing Managers' Index and a speech by Federal Open Market Committee member Christopher Waller later in the day.  They will also watch out for the US job openings data due Tuesday.

COPPER prices were flat, despite weak cues from the LME, because of a sharp depreciation in the rupee against the dollar, which makes non-ferrous metals such as copper expensive for domestic buyers.

Chile's copper production rose 6.7% on year to 492,800 tonnes in October and production rose 3.5% on year to around 4.5 million tonnes in the first ten months of the year. A production ramp-up at Teck Resources' Quebrada Blanca mine and higher production from the Escondida mine have been the main contributors to copper production growth in Chile this year, ING Economics said in a report.

LEAD contracts traded in the green due to a fall in stocks by 175 tonnes at LME-registered warehouses. 

At 1614 IST, on the MCX, the December futures contract of:

–Aluminium was at INR 241.80 a kg, down 0.2%

–Copper was steady at INR 808.70 a kg

–Lead was at INR 182.25 a kg, up 0.2% 

–Zinc was at INR 286.00 a kg, down 0.2%

Trading levels for the day on the MCX:

-Aluminium contract seen at INR 238.95-246.15

-Copper contract seen at INR 796.00-816.00

-Lead contract seen at INR 180.25-183.85

-Zinc contract seen at INR 279.80-292.10

End

US$1 = INR 84.70

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

Edited by Deepshikha Bhardwaj

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