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Informist, Thursday, Jan. 23, 2025

By Ashutosh Pati

MUMBAI – Futures contracts of most base metals edged lower on the Multi Commodity Exchange of India and the London Metal Exchange on Thursday due to concerns over a 'global trade war' following US President Donald Trump's plans to impose tariffs on most countries, analysts said. Market sentiment was also weighed down by the upcoming inactivity in Chinese trade ahead of the Lunar New Year holidays from Jan. 29 to Feb. 12.      

US President Donald Trump on Tuesday said his administration was discussing a 10% tariff on Chinese imports and also vowed to hit the European Union with tariffs.

"... increased import levies on goods from key trading partners, including China, Mexico, and Canada, has intensified concerns about a global trade war, dampening global economic growth. This exerts further pressure on China's economy, and consequently weakens demand for industrial metals," Kotak Securities said in a report.

However, hope of fresh stimulus in China limited the downside in base metal prices as market participants are expecting that the People's Bank of China could reduce the reserve requirement ratio for banks and support economic activity. China is the top producer and consumer of non-ferrous metals and a boost to its economy could support demand for metals.

December's economic indicators in China were mixed but showed some bright spots in retail sales and industrial production growth, Dow Jones quoted analysts at HSBC as saying in a note. China's fiscal policy could be "very active" in 2025, but monetary policymakers face a delicate balance between the twin targets of stabilising the yuan and stimulating economic growth, it said.

A fall in inventories at warehouses registered with the LME also restricted the downside in base metals prices. ALUMINIUM inventories fell by 2,500 tonnes to 597,675 tonnes and COPPER stocks fell by 1,350 tonnes to 205,050 tonnes. ZINC stocks fell by 1,825 tonnes to 191,125 tonnes and LEAD inventories declined by 1,925 tonnes to 227,496 tonnes.

Market participants will take further cues from a speech by US President Donald Trump at the World Economic Forum in Switzerland and US weekly jobless claims later in the day.

Zinc prices fell as the global zinc market deficit narrowed to 52,900 tonnes in November from 65,400 tonnes in October, Kedia Advisory said in a note, citing data from the International Lead and Zinc Study Group.

At 1711 IST, on the MCX, the January futures contract of:

–Aluminium was at INR 252.20 a kg, down 1.2%

–Copper was at INR 830.30 a kg, down 0.1%

–Lead was at INR 178.10 a kg, up 0.1%

–Zinc was at INR 271.55 a kg, down 1.3%

Trading levels for the day on the MCX:

-Aluminium contract seen at INR 248.00-INR 256.60

-Copper contract seen at INR 817.70-INR 837.10

-Lead contract seen at INR 175.00-INR 179.90

-Zinc contract seen at INR 265.80-INR 276.00

End

US$1 = INR 86.46

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

Edited by Deepshikha Bhardwaj

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