India Base Metals
Most down on weakness in yuan, focus on US economic data
This story was originally published at 16:45 IST on 3 January 2025
Register to read our real-time news.Informist, Friday, Jan. 3, 2025
By Sandeep Sinha
MUMBAI – Futures contracts of most base metals fell on the Multi Commodity Exchange of India and the London Metal Exchange on Friday as the yuan fell to the lowest level in over a year against the dollar. The yuan fell 0.2% to 7.31, making dollar-denominated base metals expensive for Chinese buyers.
Sentiment for non-ferrous metals was further hit by lower-than-expected official and private manufacturing purchasing managers' index data from China and continued strength in the dollar. Data released by China's National Bureau of Statistics Tuesday showed the country's official manufacturing PMI fell to 50.1 in December from 50.3 in November. On Thursday, Caixin China General manufacturing PMI for December came in at 50.5, down from 51.5 in November and against expectations of 51.7 by analysts polled by Reuters.
"Most base metals are likely to trade lower influenced by mixed macroeconomic data from China and the US. Also, stronger US Dollar Index could add further pressure on the metal prices," AngelOne said in a note.
However, the fall in LME-monitored warehouse stocks restricted the downside in base metals. ALUMINIUM stocks fell by 4,500 tonnes to 630,150 tonnes, COPPER stocks were down 1,550 tonnes at 269,800 tonnes, LEAD stocks declined by 4,100 tonnes to 238,100 tonnes, and ZINC stocks were lower by 3,775 tonnes at 230,325 tonnes.
Market participants are waiting for a speech by US Federal Open Market Committee member Thomas Barkin and US Institute of Supply Management's manufacturing purchasing managers' index later in the day for further cues.
Aluminium prices fell as market players increased their short positions on the domestic exchange.
Copper prices were marginally higher ahead of the US economic data.
Lead contracts traded with a negative bias as market participants raised their short positions on the MCX.
Zinc contracts underperformed other base metals because of continued selling by commodity trading advisers.
At 1615 IST, on the MCX, the January futures contract of:
–Aluminium was at INR 238.45 a kg, down 0.8%
–Copper was at INR 795.45 a kg, up 0.1%
–Lead was at INR 176.95 a kg, down 0.2%
–Zinc was at INR 273.20 a kg, down 1.1%
Trading levels for the day on the MCX:
-Aluminium contract seen at INR 237.0-241.0
-Copper contract seen at INR 790.80-797.45
-Lead contract seen at INR 176.47-178.33
-Zinc contract seen at INR 272.50-276.80
End
US$1 = INR 85.77
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Ashish Shirke
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