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Informist, Thursday, Feb. 6, 2025

By Ashutosh Pati

MUMBAI – Futures contracts of all base metals traded in the green on the Multi Commodity Exchange of India and the London Metal Exchange Thursday because of improved risk sentiment and expectations of a revival in Chinese demand, analysts said. Market sentiment was further lifted by a fall in inventories of base metals, except lead, at warehouses registered with the LME.

Prices of base metals rose, driven by optimism for a demand rebound in China following the Lunar New Year as market participants expect a resurgence in manufacturing activity next week, which could trigger inventory restocking and support copper prices amid low exchange stocks, Kotak Securities said in a report.

ALUMINIUM inventories at LME-accredited warehouses fell 4,500 tonnes to 572,200 tonnes and COPPER inventories fell 3,050 tonnes to 249,275 tonnes. ZINC stocks fell 1,675 tonnes to 172,475 tonnes. LEAD inventories rose 150 tonnes to 221,325 tonnes.

Additionally, Chinese participants were back in the market after the Lunar New Year holidays. "We expect that a continued increase in liquidity will further support the complex on the upside in the coming days," Daria Efanova, head of research at Sucden Financial, said in a note.

However, any further upside in base metals prices was capped by a firm dollar. At 1726 IST, the dollar index, which measures the strength in the greenback against a basket of six major currencies, was up 0.3% at 107.96. A stronger greenback makes dollar-denominated commodities such as base metals expensive for buyers holding other currencies. For further cues, market participants await the US non-farm payrolls report for January due Friday.

At 1727 IST, on the MCX, the February futures contract of:

–Aluminium was at INR 256.45 a kg, up 0.6%

–Copper was at INR 855.25 a kg, up 0.5%

–LEAD was at INR 180.85 a kg, up 0.2%

–Zinc was at INR 268.35 a kg, up 0.4%

Trading levels for the day on the MCX:

-Aluminium contract seen at INR 252.20-INR 261.50

-Copper contract seen at INR 845.40-INR 870.50

-Lead contract seen at INR 178.90-INR 183.50

-Zinc contract seen at INR 263.30-INR 275.70

End

US$1 = INR 87.58

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Tanima Banerjee

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