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Informist, Monday, Jan. 13, 2025

By Ashutosh Pati

MUMBAI – Futures contracts of all base metals rose on the Multi Commodity Exchange of India and the London Metal Exchange due to strong economic data from China. The rise was also due to a sharp fall in the rupee, which makes base metals expensive for domestic buyers.

China's exports rose 10.7% on-year in December from a 6.7% rise in November. "December's (trade) data likely benefited from some export front-loading ahead of US President-elect Donald Trump's inauguration this month," Lynn Song, chief economist, Greater China, at ING Economics said in a report.

China's imports of copper products rose 21.8% on-year to 602,000 tonnes, the highest since October 2020. China's commodity imports in December remained relatively strong, reflecting the modest improvement in manufacturing activity in Oct-Dec, analysts at ANZ Research said in a report. China is the world's largest producer and consumer of non-ferrous metals, and positive data from the country signals improvement in demand for metals.

The rupee fell 0.7% against the dollar and ended at a record closing low of 86.58, which pushed up prices of base metals.

A fall in inventories at warehouses registered with the LME also supported prices. Aluminium stocks fell by 2,500 tonnes to 616,775 tonnes and copper inventories declined by 975 tonnes to 262,975 tonnes. Zinc inventories fell by 3,450 tonnes to 213,450 tonnes and lead stocks declined by 2,550 tonnes to 225,050 tonnes.

Investors await the US consumer price index due Wednesday for further cues.

However, any further upside in non-ferrous metals is restricted by a firm dollar, which makes commodities priced in the greenback expensive for buyers holding other currencies. At 1652 IST, the dollar Index, which measures the strength of the dollar against a basket of six major currencies, was 0.4% higher at 110.05 on stronger-than-expected US jobs data. The US Bureau of Labor Statistics data showed on Friday that non-farm payroll employment in December came in at 256,000 from 227,000 in November. Analysts polled by Dow Jones estimated the payroll to come at 155,000.

At 1657 IST, on the MCX, the January futures contract of:

–Aluminium was at INR 246.50 a kg, up 0.6%

–Copper was at INR 829.30 a kg, up 0.4%

–Lead was at INR 178.30 a kg, up 0.1% 

–Zinc was at INR 275.15 a kg, up 0.8%

Trading levels for the day on the MCX:

-Aluminium contract seen at INR 242.90-249.90

-Copper contract seen at INR 817.80-841.40

-Lead contract seen at INR 176.50-180.10

-Zinc contract seen at INR 270.30-280.60

End

US$1 = INR 86.58

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

Edited by Saji George Titus

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