India Base Metals
Rise on soft US economic data, fall in LME inventories
This story was originally published at 20:24 IST on 16 January 2025
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By Ashutosh Pati
MUMBAI – Futures contracts of all base metals rose on the Multi Commodity Exchange of India and the London Metal Exchange Thursday as softer-than-expected economic data from the US raised hopes of multiple rate cuts by the US Federal Reserve this year. Market sentiment was lifted by a fall in inventories at warehouses registered with the LME.
The US CPI rose 2.9% on year in December, against 2.7% in November, according to the US Bureau of Labor Statistics. On a monthly basis, the CPI rose 0.4%. Core CPI rose 3.2% on year, lower than the 3.3% rise recorded in November. "Traders increased bets on a US Fed interest rate cut in June, with the likelihood of two rate cuts this year rising," Motilal Oswal Financial Services said in a report.
Aluminium stocks at LME-accredited warehouses fell by 2,500 tonnes to 611,875 tonnes and copper inventories declined by 500 tonnes to 260,250 tonnes. Zinc inventories at LME-accredited warehouses fell by 2,475 tonnes to 203,900 tonnes and lead stocks fell by 2,179 tonnes to 236,821 tonnes.
Additionally, base metals are poised for gains on improved Chinese demand ahead of the Lunar New Year, Kotak Securities said in a report.
Market participants now await the US core retail sales data and the jobless claims, both due later in the day, for further cues.
COPPER prices rose on hopes of a robust Chinese economic stimulus and declining Chilean copper production, Kotak Securities said in a report.
ALUMINIUM prices rose amid potential import curbs by the European Union on Russian supplies.
At 1635 IST, on the MCX, the January futures contract of:
–Aluminium was at INR 252.95 a kg, up 1.3%
–Copper was at INR 838.95 a kg, up 0.8%
–LEAD was at INR 177.55 a kg, up 0.5%
–ZINC was at INR 273.55 a kg, up 0.2%
Trading levels for the day on the MCX:
-Aluminium contract seen at INR 248.30-257.70
-Copper contract seen at INR 826.70-849.20
-Lead contract seen at INR 175.40-179.80
-Zinc contract seen at INR 269.00-279.50
End
US$1 = INR 86.55
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Rajeev Pai
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