India Base Metals
All down on firm dollar, weak China economic data
This story was originally published at 21:08 IST on 28 January 2025
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By Ashutosh Pati
MUMBAI – Futures contracts of all base metals fell on the Multi Commodity Exchange of India, taking cues from the London Metal Exchange, because of a firm dollar. Market sentiment was further hurt by weak economic data from top consumer China.
China's official manufacturing purchasing managers' index was at 49.1 for January, marking the first contraction since September. The latest data was lower than the 50.1 expected by economists polled by Reuters and 50.1 for December. A reading above 50 indicates an expansion, while one below 50 shows a contraction.
"We have seen plenty of support measures from Beijing over the past few months, but, so far, they have failed to have a meaningful impact on industrial metals demand," analysts at ING Think said in a report. "An uncertain path for China's economic recovery remains one of the key downside risks to our industrial metals outlook for 2025," the analysts said.
At 2037 IST, the dollar index, which measures the strength in the greenback against a basket of six major currencies, was up 0.4% at 107.87. A stronger greenback makes dollar-denominated commodities such as base metals expensive for buyers holding other currencies, denting demand.
Additionally, trading activity was subdued as China markets were closed for the Lunar New Year holidays.
However, further fall in ZINC and LEAD prices was cushioned by a fall in inventories at warehouses registered with the LME. ZINC stocks fell by 3,625 tonnes to 183,025 tonnes and LEAD inventories declined by 2,225 tonnes to 222,525 tonnes.
At 2051 IST, on the MCX, the February futures contract of:
–Aluminium at INR 248.35 a kg, down 0.3%
–Copper at INR 825.80 a kg, down 0.1%
–Lead at INR 178.55 a kg, down 0.7%
–Zinc at INR 266.40 a kg, down 1.1%
Trading levels for the day on the MCX:
-Aluminium contract seen at INR 247.10-INR 258.70
-Copper contract seen at INR 818.90-INR 842.40
-Lead contract seen at INR 174.30-INR 178.60
-Zinc contract seen at INR 259.20-INR 269.80
End
US$1 = INR 86.52
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Akul Nishant Akhoury
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