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Informist, Thursday, Dec. 12, 2024

By Ashutosh Pati

MUMBAI – Futures contracts of all base metals fell on the Multi Commodity Exchange of India and the London Metal Exchange because of continued weakness in the Chinese yuan against the dollar. Also, investors were expecting China to announce stimulus measures at its two-day Central Economic Work Conference. However, the conference ended without announcing any such stimulus, weighing on prices.

The yuan fell 0.1% to 7.268 against the dollar, making dollar-denominated base metals expensive for Chinese buyers. The country is the biggest producer and consumer of base metals. Chinese authorities are reportedly planning to allow the yuan to weaken in 2025 as the country braces for potential trade tariffs by the US on the return of Donald Trump to the White House, according to media reports. 

However, any further fall in prices was limited by a fall in stocks at warehouses registered with the LME. Aluminium stocks fell by 2,500 tonnes to 675,100 tonnes and zinc stocks fell by 1,300 tonnes to 273,650 tonnes. Lead inventories fell by 2,250 tonnes to 264,325 tonnes and Copper stocks fell by 75 tonnes.

ALUMINIUM prices fell as traders increased their short positions on the domestic exchange. The increase in production and expansion of fresh capacities in top producer China also weighed on prices.

COPPER prices fell, taking cues from the LME. Chilean copper commission Cochilco's estimates show that the global refined copper market will remain in a supply surplus of 81,000 tonnes this year and 76,000 tonnes in 2025, ING Economics said in a report. Copper output in Chile is expected to rise by 3% on year to 5.4 million tonnes this year and a further 6% on year to 5.7 million tonnes in 2025.

LEAD contracts traded a tad lower, tracking weakness in other base metals.

ZINC contracts underperformed other base metals due to rising output in China.

At 1854 IST, on the MCX, the December futures contract of:

–ALUMINIUM was at INR 244.25 a kg, down 0.2%

–Copper was at INR 827.00 a kg, down 0.3%

–LEAD was at INR 179.25 a kg, down 0.1%

–ZINC was at INR 288.95 a kg, down 0.7%

Trading levels for the day on the MCX:

-Aluminium contract seen at INR 241.40-248.60

-Copper contract seen at INR 819.60-844.20

-Lead contract seen at INR 177.40-181.20

-Zinc contract seen at INR 285.40-296.50

End

US$1 = INR 84.86

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

Edited by Akul Nishant Akhoury

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