India Base Metals
Up on China's strong GDP growth, fall in LME stocks
This story was originally published at 17:35 IST on 17 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 on Friday, because of strong GDP growth of China, which is the world's top producer and consumer of base metals. Sentiment was also boosted by a fall in inventories at warehouses registered with the LME.
China's GDP expanded by 5.4% in the Oct-Dec quarter of 2024, outpacing the 4.6% rise in the previous quarter, according to the National Bureau of Statistics of China. The country's GDP reached 134.90 trillion yuan, or around $18.77 trillion, in 2024, meeting the growth target of 5%.
"Expectations of China deploying (robust) economic assistance measures, such as fiscal and monetary stimulus, to increase consumption have spurred positive sentiment," Motilal Oswal Financial Services said in a report.
Aluminium inventories at LME-accredited warehouses fell by 2,500 tonnes to 611,875 tonnes and copper inventories fell by 175 tonnes to 260,075 tonnes. Zinc stocks fell by 2,550 tonnes to 201,350 tonnes and lead inventories declined by 2,450 tonnes to 234,371 tonnes.
However, any further gains in base metal prices were capped because of a firm dollar, which makes commodities priced in the greenback expensive for buyers holding other currencies, denting demand. At 1634 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was up 0.1% at 109.04.
Market participants are waiting for the release of US building permits, housing starts, and industrial production data later in the day for further cues.
ALUMINIUM prices edged higher as the European Union is reportedly considering a proposal to ban imports of primary aluminium from Russia over its invasion of Ukraine, Motilal Oswal said in a report.
COPPER prices hit a 10-week high of INR 840.95 on the MCX due to a forecast of lower production in Chile, the largest producer of the red metal. Chile expects 5.54 million tonnes of copper production by 2034, down from the previous projection of 6.34 million tonnes, Dow Jones quoted analysts at SP Angel as saying in a note.
At 1559 IST, on the MCX, the January futures contract of:
–Aluminium was at INR 255.55 a kg, up 1.2%
–Copper was at INR 838.45 a kg, up 0.1%
–Lead was at INR 178.15 a kg, up 0.2%
–Zinc was at INR 277.20 a kg, up 1.1%
Trading levels for the day on the MCX:
-Aluminium contract seen at INR 250.00-INR 257.50
-Copper contract seen at INR 833.00-INR 848.00
-Lead contract seen at INR 175.00-INR 181.00
-Zinc contract seen at INR 273.00-INR 279.00
End
US$1 = INR 86.61
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Nishant Maher
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