India Base Metals
Most up as Trump halts tariffs, positive US economic data
This story was originally published at 19:17 IST on 4 February 2025
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By Ashutosh Pati
MUMBAI – Futures contracts of most base metals rose on the Multi Commodity Exchange of India and the London Metal Exchange Tuesday after US President Donald Trump agreed to pause the proposed tariffs on Mexico and Canada for a month, analysts said. Market sentiment was lifted by positive economic data from the US.
The US Institute of Supply Management's Manufacturing Purchasing Managers' Index rose to 50.9 in January from 49.2 in December. This marked the first expansion in the index since October 2022, indicating growth in the manufacturing sector. Economists polled by Reuters saw the index rising to 49.8. A reading above 50.0 signals expanding, while a reading below 50.0 indicates contraction.
However, any further upside in base metals prices was capped as China announced retaliatory tariffs against the US, renewing a trade war between the world's top two economies.
"From the perspective of industrial metals, the implementation of the tariffs for any period of time will be a net bearish development," Dow Jones quoted analysts at Macquarie as saying in a note. "The tariffs would drag on global goods demand and industrial production growth, by extension hurting commodities demand. At the same time, they would introduce further headwinds by boosting the dollar and reducing rate cut prospects," the analysts said.
A firm dollar also capped further upside in base metals prices. At 1730 IST, the dollar index, which measures the strength in the greenback against a basket of six major currencies, was up 0.2% at 108.60. A stronger greenback makes dollar-denominated commodities such as base metals expensive for buyers holding other currencies, denting demand.
Market participants await the US Job Openings and Labor Turnover Survey's monthly job openings data due later in the day for further cues.
ALUMINIUM prices were steady with a positive bias as concerns about tariffs were offset by a fall in inventories at warehouses registered with the LME. Aluminium stocks fell by 6,000 tonnes to 249,125 tonnes.
ZINC prices rose, taking cues from the LME as inventories at LME-accredited warehouses fell by 2,850 tonnes to 176,425 tonnes.
At 1739 IST, on the MCX, the February futures contract of:
–Aluminium was steady at INR 253.50 a kg
–COPPER was at INR 837.85 a kg, up 0.3%
–LEAD was at INR 179.20 a kg, up 0.1%
–Zinc was at INR 267.40 a kg, up 0.1%
Trading levels for the day on the MCX:
-Aluminium contract seen at INR 249.00-INR 257.00
-Copper contract seen at INR 827.00-INR 848.00
-Lead contract seen at INR 175.00-INR 183.00
-Zinc contract seen at INR 264.00-INR 272.00
End
US$1 = INR 87.07
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Deepshikha Bhardwaj
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