India Base Metals
Most down on firm dollar, Trump's tariff threat
This story was originally published at 18:56 IST on 21 January 2025
Register to read our real-time news.Informist, Tuesday, Jan. 21, 2025
By Ashutosh Pati
MUMBAI – Futures contracts of most base metals on the Multi Commodity Exchange of India and the London Metal Exchange edged lower due to a firm dollar. Concerns about tariffs by US President Donald Trump, which may derail global economic growth, also weighed on demand for metals, analysts said.
On Monday, Donald Trump said that his administration would impose 25% tariff on Mexico and Canada from Feb. 1. At 1836 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was up 0.6% at 108.74. A stronger greenback makes dollar-denominated commodities such as base metals expensive for buyers holding other currencies, denting demand.
"While an initial cautious approach towards China offered some respite, uncertainty surrounding US trade policies continued to weigh on sentiment. Further, traders remained apprehensive ahead of the Lunar New Year holiday in China and anticipated interest rate decisions from central banks," Kotak Securities said in a report.
However, hope of fresh stimulus in China limited the downside in base metal prices. "Hope for Chinese stimulus measures persisted, with state media hinting at potential reductions in reserve requirements by the People's Bank of China," the report said.
A fall in inventories of most base metals also restricted the fall in prices. ALUMINIUM inventories at LME-accredited warehouses fell by 2,600 tonnes to 604,275 tonnes and ZINC stocks fell by 4,000 tonnes to 195,125 tonnes. LEAD inventories declined by 1,425 tonnes to 231,221 tonnes.
At 1836 IST, on the MCX, the January futures contract of:
–Aluminium was at INR 254.65 a kg, down 0.6%
–COPPER was steady at INR 832.05 a kg
–Lead was at INR 177.15 a kg, down 0.5%
–Zinc was at INR 276.90 a kg, down 0.5%
Trading levels for the day on the MCX:
-Aluminium contract seen at INR 250.50-INR 259.20
-Copper contract seen at INR 820.00-INR 842.00
-Lead contract seen at INR 174.30-INR 179.60
-Zinc contract seen at INR 271.40-INR 281.30
End
US$1 = INR 86.58
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Avishek Dutta
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