India Base Metals
Most down on concern about tariffs, weak demand from China
This story was originally published at 19:44 IST on 22 January 2025
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By Ashutosh Pati
MUMBAI – Futures contracts of most base metals on the Multi Commodity Exchange of India and the London Metal Exchange fell on Wednesday due to renewed concerns about a US-China trade war, analysts said. US President Donald Trump on Tuesday said his administration was discussing a 10% tariff on Chinese imports and vowed to also hit the European Union with tariffs.
"Tariffs are the biggest risk to our industrial metals outlook," Warren Patterson, head of commodities strategy at ING Economics, said in a report. "We believe with President Trump back in the White House, the downside risks have increased for industrial metals," Patterson said.
Weaker demand from China ahead of the Lunar New Year also weighed on sentiment, Kotak Securities said in a report. Meanwhile, traders await interest rate decisions by the Bank of Japan and the US Federal Reserve, the brokerage said.
However, hope of fresh stimulus in China limited the downside in base metal prices. The People's Bank of China could reduce the reserve requirement ratio for banks, injecting liquidity into the economy and supporting demand for metals, the report said.
A fall in inventories of base metals at warehouses registered with the LME also limited the fall in prices. ALUMINIUM inventories fell by 4,100 tonnes to 600,175 tonnes and COPPER stocks fell by 125 tonnes to 206,400 tonnes. ZINC stocks fell by 2,175 tonnes to 192,950 tonnes and LEAD inventories declined by 1,800 tonnes to 229,421 tonnes.
Copper contracts edged lower as global production of refined copper rose 3.7% on year to 25.11 million tonnes in Jan-Nov.
Aluminium prices fell as production of primary aluminium rose 3.3% month-on-month to 6.24 million tonnes in December.
At 1918 IST, on the MCX, the January futures contract of:
–Aluminium was at INR 254.95 a kg, down 0.4%
–Copper was at INR 832.20 a kg, down 0.2%
–Lead was at INR 178.35 a kg, up 0.6%
–Zinc was at INR 275.35 a kg, down 0.3%
Trading levels for the day on the MCX:
-Aluminium contract seen at INR 250.30-INR 258.60
-Copper contract seen at INR 822.00-INR 842.40
-Lead contract seen at INR 175.00-INR 179.70
-Zinc contract seen at INR 269.60-INR 279.60
End
US$1 = INR 86.32
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Avishek Dutta
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