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Informist, Monday, Dec. 9, 2024

By Ashutosh Pati

MUMBAI – Futures contracts of all base metals rose on the Multi Commodity Exchange of India and the London Metal Exchange on Monday as China pledged additional fiscal measures. The positive sentiment was lifted by a weaker dollar and a fall in inventories at warehouses monitored by the Shanghai Futures Exchange.

China's leaders vowed more proactive fiscal measures and moderately looser monetary policy next year to boost domestic consumption, CNBC reported. The Politburo, a top decision-making body of the country, said it will stabilise the property and stock markets while strengthening the unconventional counter-cyclical adjustment. China is the top producer and consumer of non-ferrous metals and additional fiscal measures in the country could aid demand for metals.  

At 1551 IST, the dollar index, which measures the strength in the greenback against a basket of six major currencies, was down 0.1% at 105.87. A weaker greenback makes dollar-denominated commodities, such as base metals, cheaper for buyers holding other currencies.

Aluminium stocks at Shanghai Futures Exchange monitored warehouses fell by 3,425 tonnes on week to 224,376 tonnes and inventories at LME-accredited warehouses fell by 3,000 tonnes to 681,600 tonnes. Zinc inventories at warehouses monitored by the Shanghai Futures Exchange fell sharply by 24,001 tonnes to 52,983 tonnes and stocks at LME-accredited warehouses fell by 725 tonnes to 270,650 tonnes. Lead stocks at Shanghai Futures Exchange monitored warehouses fell by 321 tonnes on week to 48,266 tonnes. 

Moreover, there are signs of tightness in the base metal markets as unplanned disruptions and supply outages are starting to increase, ANZ Research analysts said in a note. This is being exacerbated by an increase in China's refining capacity, which has led to tightness in concentrate markets and caused treatment charges to fall sharply in recent months, ANZ Research said.

Investors will await preliminary trade data from China due Tuesday and China's central economic work conference starting Wednesday for further cues.

ALUMINIUM prices rose as China vowed more fiscal measures. The global aluminium market will be under-supplied in 2025 as demand growth will exceed output growth, which could support prices, ANZ Research said. 

At 1552 IST, on the MCX, the December futures contract of:

–Aluminium was at INR 244.50 a kg, up 0.5%

–COPPER was at INR 830.40 a kg, up 1.1%

–LEAD was at INR 182.05 a kg, up 0.7%

–ZINC was at INR 291.45 a kg, up 1.9%

Trading levels for the day on the MCX:

-Aluminium contract seen at INR 239.40-246.10

-Copper contract seen at INR 811.00-832.00

-Lead contract seen at INR 178.60-182.30

-Zinc contract seen at INR 280.65-293.00

End

US$1 = INR 84.73

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

Edited by Saji George Titus

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