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Informist, Tuesday, Jan. 7, 2025

By Ashutosh Pati

MUMBAI – Futures contracts of copper and aluminium rose on the Multi Commodity Exchange of India, tracking a rise in contracts on the London Metal Exchange, as the dollar weakened for the third consecutive session. Market sentiment was lifted by a fall in inventories at warehouses registered with the LME.

At 1558 IST, the Dollar Index, which measures the strength of the greenback against a basket of six major currencies, was down 0.4% at 107.89. A weaker dollar makes commodities such as aluminium and copper, which are priced in the greenback, cheaper for buyers holding other currencies, aiding demand.

"Enthusiasm was also boosted by reports of China, which announced intentions to increase ultra-long treasury bond funding in 2025, with the goal of boosting corporate and consumer expenditure," Motilal Oswal Financial Services said in a report. China's President Xi Jinping, in his New Year's Day speech, pledged more proactive economic policies to support growth in 2025. China is the top consumer of non-ferrous metals and a boost to its economy could increase demand for these metals.

ALUMINIUM inventories at LME-accredited warehouses fell by 2,500 tonnes to 624,275 tonnes. COPPER inventories fell by 1,500 tonnes to 267,150 tonnes.

On Monday, the Dollar Index fell after a report in The Washington Post that US president-elect Donald Trump's aides were exploring tariffs only on imports of critical items, which supported the price of copper. Trump denied the report, but copper held its gains. Moreover, the dollar's failure to recover all its intraday losses Monday likely indicates that the contents of The Washington Post report sounded sensible, ING Economics said in a report.

For further cues, investors await the US JOLTS Job Opening report due later in the day. They will also monitor minutes of the US Federal Open Market Committee's December meeting, due Thursday, and non-farm payrolls data due Friday.

At 1558 IST, on the MCX, the January futures contract of:

–Aluminium was at INR 239.30 a kg, up 0.4%

–Copper was at INR 816.95 a kg, up 0.5%

–LEAD was at INR 177.20 a kg, down 0.1% 

–ZINC was at INR 273.70 a kg, down 0.1%

Trading levels for the day on the MCX:

-Aluminium contract seen at INR 235.50-241.30

-Copper contract seen at INR 800.00-826.00

-Lead contract seen at INR 175.70-178.80

-Zinc contract seen at INR 268.45-277.95

End

US$1 = INR 85.71

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

Edited by Rajeev Pai

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