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Informist, Wednesday, Dec. 11, 2024

By Ashutosh Pati

MUMBAI – Futures contracts of all base metals fell on the Multi Commodity Exchange of India, tracking a fall in contracts on the London Metal Exchange, as the dollar extended gains for the fourth consecutive day. A stronger greenback makes dollar-denominated commodities, such as base metals, expensive for buyers holding other currencies, denting demand.

At 1543 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was up 0.3% at 106.71.

China's construction sector remains under pressure, dampening physical demand for base metals, Daria Efanova, head of research at Sucden Financial said in a note. Additionally, the current decline in demand is mitigating the effects of the concentrate shortages that markets are facing right now, further weighing on pricing prospects, Efanova said.

Investors will closely watch China's Central Economic Work Conference till Thursday for further cues. They will also await the US CPI due later Wednesday. 

China's top decision-making body, the Politburo, voted Monday for more proactive fiscal measures and moderately looser monetary policy next year to boost domestic consumption. "These changes occur as China faces persistent economic issues and prepares for the potential consequences of a second Trump presidency," Motilal Oswal Financial Services said in a report.

A further fall in metal prices was capped by a fall in inventories at warehouses registered with the LME. Aluminium stocks fell by 2,000 tonnes to 677,600 tonnes and zinc stocks fell by 2,100 tonnes to 274,950 tonnes. Lead inventories fell by 1,975 tonnes to 266,575 tonnes. However, copper inventories rose by 400 tonnes to 268,500 tonnes.

ALUMINIUM prices fell due to profit-taking by traders on the domestic exchange after two days of gains. 

COPPER prices traded lower due to strength in the dollar and market participants increasing their short positions on the MCX.

At 1545 IST, on the MCX, the December futures contract of:

–Aluminium was at INR 243.70 a kg, down 0.7%

–Copper was at INR 827.00 a kg, down 0.4%

–LEAD was at INR 180.50 a kg, down 0.1%

–ZINC was at INR 290.85 a kg, down 0.7%

Trading levels for the day on the MCX:

-Aluminium contract seen at INR 242.00-246.00

-Copper contract seen at INR 822.00-834.00

-Lead contract seen at INR 179.00-182.00

-Zinc contract seen at INR 288.00-293.00

End

US$1 = INR 84.83

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

Edited by Saji George Titus

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