India Base Metals
Aluminium, zinc dn on weak yuan; dip in stocks limits loss
This story was originally published at 19:24 IST on 5 February 2025
Register to read our real-time news.Informist, Wednesday, Feb. 5, 2025
By Ashutosh Pati
MUMBAI – Futures contracts of aluminium and zinc edged lower on the Multi Commodity Exchange of India and the London Metal Exchange Wednesday because of a weakness in the yuan amid concern about a trade war between China and the US. However, any further downside in prices was limited by a fall in inventories at warehouses registered with the LME.
China announced retaliatory tariffs against Washington after US President Donald Trump's additional tariff on imports from China came into effect Tuesday. Chinese authorities announced a 15% tariff on coal and liquefied natural gas imports from the US. It also imposed a 10% additional tariff on oil and agricultural equipment imports from the US. "...escalating trade tensions between the two largest economies (China and the US) pose a serious threat to metal consumption," Kotak Securities said in a report.
The yuan slumped 1.2% to 7.272 against a dollar, making dollar-denominated base metals expensive for Chinese buyers. The country is the biggest producer and consumer of base metals.
ALUMINIUM inventories at LME-accredited warehouses fell by 4,500 tonnes to 576,700 tonnes, providing some support to prices. Market participants await the US final services Purchasing Managers Index and the Institute for Supply Management's services PMI due later in the day for further cues.
COPPER prices rose, taking cues from the LME, because of a firm dollar and a fall in stocks at LME-accredited warehouses. Copper inventories fell by 2,625 tonnes to 252,325 tonnes. At 1854 IST, the dollar index, which measures the strength in the greenback against a basket of six major currencies, was down 0.5% at 107.45.
At 1857 IST, on the MCX, the February futures contract of:
–Aluminium was at INR 252.80 a kg, down 0.4%
–Copper was at INR 841.30 a kg, up 0.2%
–LEAD was at INR 180.40 a kg, up 0.3%
–Zinc was at INR 264.90 a kg, down 1.1%
Trading levels for the day on the MCX:
-Aluminium contract seen at INR 249.90-INR 259.10
-Copper contract seen at INR 833.10-INR 854.20
-Lead contract seen at INR 178.00-INR 183.00
-Zinc contract seen at INR 259.60-INR 272.10
End
US$1 = INR 87.47
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Akul Nishant Akhoury
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