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Informist, Monday, Jan. 6, 2025

By Ashutosh Pati

MUMBAI – Futures contracts of all base metals rose on the Multi Commodity Exchange of India Monday, tracking a rise in contracts on the London Metal Exchange because of a weaker dollar. Market sentiment was also lifted by a fall in inventories of metals, except copper, at warehouses monitored by the Shanghai Futures Exchange.

At 1950 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was down 0.9% at 107.97. A weaker greenback makes dollar-denominated commodities, such as base metals, cheaper for holders of other currencies, aiding demand.

ALUMINIUM stocks at Shanghai Futures Exchange-monitored warehouses fell by 7,946 tonnes from the previous week to 193,239 tonnes and ZINC inventories fell by 6,324 tonnes to 23,912 tonnes. LEAD stocks fell by 3,248 tonnes to 48,573 tonnes while COPPER inventories rose by 9,002 tonnes to 83,174 tonnes.

Additionally, hopes of fresh stimulus from China also supported prices of base metals. 

China's central bank intends to reduce the reserve requirement ratio and interest rates at an appropriate time, Motilal Oswal Financial Services said in a report. China's decision is part of a larger strategy to boost growth, which is now hampered by a faltering real estate sector that affects consumer wealth and household spending, the report said.

Investors will closely monitor the US job openings data due Tuesday for further cues.

Copper prices rose, taking cues from the LME because of a weaker dollar. However, rising copper output could weigh on prices. Chile's copper output rose 9.8% on year to 488,519 metric tonnes in November, while China's copper cathode production increased by 0.94% on month, reaching a 4.61% on-year growth, Kedia Advisory said in a note.

At 1951 IST, on the MCX, the January futures contract of:

–Aluminium was at INR 238.40 a kg, up 0.1%

–Copper was at INR 812.00 a kg, up 1.5%

–Lead was at INR 177.20 a kg, up 0.3% 

–Zinc was at INR 274.30 a kg, up 0.3%

Trading levels for the day on the MCX:

-Aluminium contract seen at INR 234.70-241.50

-Copper contract seen at INR 791.90-814.50

-Lead contract seen at INR 175.30-178.50

-Zinc contract seen at INR 269.00-279.50

End

US$1 = INR 85.82

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

Edited by Akul Nishant Akhoury

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