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Informist, Thursday, Jan. 9, 2025

By Ashutosh Pati

MUMBAI – Futures contracts of all base metals rose on the Multi Commodity Exchange of India and the London Metal Exchange as market participants remain optimistic of Beijing's monetary and fiscal stimulus commitments, analysts said. Sentiment was lifted by a fall in inventories at warehouses registered with the LME.

ALUMINIUM stocks fell by 2,500 tonnes to 619,275 tonnes and COPPER inventories fell by 1,750 tonnes to 263,950 tonnes. LEAD inventories at LME-accredited warehouses fell by 2,900 tonnes to 227,600 tonnes and ZINC stocks fell by 3,625 tonnes to 216,900 tonnes.

"LME base metals may edge higher as investors pin hopes on China's pledges for enhanced monetary and fiscal stimulus, especially following disappointing inflation numbers," Kotak Securities said in a note. China's CPI, the main gauge of inflation, rose 0.1% on year in December, slower than the 0.2% growth in November. China's Producer Price Index declined 2.3% on year in December, against the 2.5% drop in the previous month, according to data by the National Bureau of Statistics of China.

China is the world's top consumer of non-ferrous metals and a boost to its economy could increase demand for these metals.

However, any further upside in base metal prices was capped by the firm dollar. At 1622 IST, the Dollar Index, which measures the strength of the greenback against a basket of six major currencies, was up 0.2% at 109.19. A stronger dollar makes commodities such as base metals, which are priced in the greenback, expensive for buyers holding other currencies, denting demand.

Investors will monitor the US non-farm payrolls data due Friday for further cues.

At 1623 IST, on the MCX, the January futures contract of:

–Aluminium was at INR 242.10 a kg, up 0.9%

–Copper was at INR 825.50 a kg, up 0.4%

–Lead was at INR 176.95 a kg, up 0.3% 

–Zinc was at INR 271.70 a kg, up 0.8%

Trading levels for the day on the MCX:

-Aluminium contract seen at INR 237.45-243.45

-Copper contract seen at INR 813.00-839.00

-Lead contract seen at INR 174.85-178.25

-Zinc contract seen at INR 264.70-274.50

End

US$1 = INR 85.85

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

Edited by Rajeev Pai

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