India Base Metals
Most down on of threat of Trump's tariffs, firm dollar
This story was originally published at 20:29 IST on 31 January 2025
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MUMBAI – Futures contracts of most base metals traded in the red on the Multi Commodity Exchange of India and the London Metal Exchange Friday, as market participants were wary ahead of the Saturday deadline for additional tariffs by the US on top consumer China, analysts said. Market sentiment was further hurt by a firm dollar.
"The fears of US President Donald Trump's tariff plans remain an overhang for investors that could crimp the global demand outlook. Tariff concerns have resurfaced after Trump said he would impose tariffs on aluminium and copper -- metals needed to produce US military hardware -- as well as steel, to entice producers to make them in the US," SMC Global Securities said in a report.
At 1950 IST, the dollar index, which measures the strength in the greenback against a basket of six major currencies, was up 0.2% at 108.42. A stronger greenback makes dollar-denominated commodities such as base metals expensive for buyers holding other currencies, denting demand.
Weaker-than-expected economic data from the US also weighed on base metal prices. In the December quarter, US GDP rose 2.3%, less than the 2.5% rise expected by market participants and below the 3.1% rise in the previous quarter, which led to concerns about slowing economic growth. The country is one of the top consumers of non-ferrous metals.
Trading activity was subdued as Chinese markets were closed for Lunar New Year holidays. Market participants await the Caixin China manufacturing purchasing index on Monday for further cues.
COPPER contracts edged lower amid signs of weaker than expected economic growth in the US, ICICI Securities said in a note.
At 1950 IST, on the MCX, the February futures contract of:
–Aluminium was at INR 250.50 a kg, down 0.6%
–Copper was at INR 827.80 a kg, down 0.5%
–Lead was at INR 179.85 a kg, up 0.1%
–Zinc was at INR 263.95 a kg, down 1.2%
Trading levels for the day on the MCX:
-Aluminium contract seen at INR 246.80-255.50
-Copper contract seen at INR 820.20-840.40
-Lead contract seen at INR 177.70-181.60
-Zinc contract seen at INR 260.80-270.70
End
US$1 = INR 86.60
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Avishek Dutta
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