India Base Metals
Aluminium rises on prospect of EU ban on Russian imports
This story was originally published at 20:09 IST on 29 January 2025
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By Ashutosh Pati
MUMBAI – Futures contracts of aluminium rose on the Multi Commodity Exchange of India and the London Metal Exchange as the European Union is considering a phased ban on imports of Russian aluminium ahead of the third anniversary of Russia's invasion of Ukraine. Market sentiment was lifted by a fall in inventories at LME-accredited warehouses.
If enacted, the EU sanctions could drive aluminium prices higher, analysts at ING Economics said in a report. The EU imported over 320,000 tonnes of unwrought aluminium from Russia in the first 11 months of 2024, accounting for around 6% of total imports, the analysts said.
ALUMINIUM inventories at warehouses registered with the LME fell by 2,500 tonnes to 590,350 tonnes.
However, any further upside in aluminium prices was capped by a firm dollar. At 1930 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was up 0.3% at 108.27. A stronger greenback makes dollar-denominated commodities such as aluminium expensive for buyers holding other currencies, denting demand.
Additionally, trading activity was subdued as Chinese markets were closed for the Lunar New Year holidays. Market participants await the outcome of the US Federal Open Market Committee meeting early Thursday for further cues.
COPPER contracts edged lower, taking cues from the LME because of a firm dollar. Market sentiment remained cautious after US President Donald Trump announced new tariffs on key commodities, such as copper, ahead of the Feb. 1 deadline for the first round of US tariffs on China, Kotak Securities said in a report.
"Metals markets are turning increasingly nervous about the prospect of (US) tariffs," ING Economics said in a note. A prolonged trade conflict would slow global growth and hurt demand for base metals. Tariffs are a major headwind to metals, whether in force yet or not, it said.
ZINC prices were up on concerns about supply, driven by a third consecutive year of fall in production of mined zinc, Kotak Securities said.
At 1930 IST, on the MCX, the February futures contract of:
–Aluminium at INR 251.20 a kg, up 1.6%
–Copper at INR 826.0 a kg, down 0.1%
–LEAD at INR 179.45 a kg, up 0.5%
–Zinc at INR 266.70 a kg, up 0.5%
Trading levels for the day on the MCX:
-Aluminium contract seen at INR 244.50-INR 252.70
-Copper contract seen at INR 812.30-INR 833.70
-Lead contract seen at INR 176.70-INR 181.00
-Zinc contract seen at INR 259.90-INR 269.90
End
US$1 = INR 86.54
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Deepshikha Bhardwaj
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