India Base Metals
Most down on firm dollar, concerns about demand in China
This story was originally published at 19:03 IST on 17 December 2024
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By Ashutosh Pati
MUMBAI – Futures contracts of most base metals fell on the Multi Commodity Exchange of India, tracking a fall in contracts on the London Metal Exchange because of a firm dollar. Sentiment was also hurt due to concerns about sluggish demand in China.
At 1851 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was up 0.1% at 106.97. A stronger dollar makes commodities such as base metals, which are priced in the greenback, expensive for buyers holding other currencies.
A slowdown in China's retail sales in November coupled with weak winter demand in the country has negatively impacted the demand for metals, Kotak Securities said in a report. China's industrial production expanded 5.4% on year in November, against October's 5.3% growth, but retail sales in the country grew at their weakest pace in three months at 3.0% in November, slower than the 4.8% rise in October.
Additionally, the potential for a more gradual pace of monetary policy easing by the US Federal Reserve next year has added to the market's uncertainty, the report said. For further cues, investors await the outcome of the Federal Open Market Committee's monetary policy meeting, due early Thursday.
ALUMINIUM prices fell, taking cues from LME, as the three-month LME contract fell to the lowest in a month at $2,525.50 per tonne earlier in the day due to concerns about weak demand.
COPPER contracts traded in the red, taking cues from the LME because of a firm dollar. Weak copper production in Peru added to the pessimistic sentiment, Motilal Oswal Financial Services said in a report. Copper output in Peru fell 1.4% on year in October due to reduced activity at large mines in the country, it said.
LEAD prices were flat due to lack of fresh cues.
ZINC contracts traded lower due to risk aversion as traders reduced exposure ahead of the Christmas and New Year holidays.
At 1852 IST, on the MCX, the December futures contract of:
–Aluminium was at INR 242.00 a kg, down 0.5%
–Copper was at INR 808.00 a kg, down 0.8%
–Lead was at INR 179.15 a kg, unch
–Zinc was at INR 283.90 a kg, down 0.5%
Trading levels for the day on the MCX:
-Aluminium contract seen at INR 238.80-245.50
-Copper contract seen at INR 794.90-820.80
-Lead contract seen at INR 176.70-180.20
-Zinc contract seen at INR 277.30-289.00
End
US$1 = INR 84.89
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Avishek Dutta
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