India Base Metals
Most down on profit-booking, weak yuan
This story was originally published at 18:18 IST on 10 February 2025
Register to read our real-time news.Informist, Monday, Feb. 10, 2025
By Ashutosh Pati
MUMBAI – Futures contracts of most base metals on the Multi Commodity Exchange of India and the London Metal Exchange traded in the red on Monday because of profit-booking after a sharp rally in prices last week, analysts said. Market sentiment was further hurt by weakness in the yuan amid concerns about a trade war between China and the US.
US President Donald Trump announced that the US would impose 25% tariffs on all steel and aluminium imports, with another announcement about reciprocal tariffs on several countries on Tuesday or Wednesday. He did not specify when the new duties would take effect. China's retaliatory tariffs on the US came into effect Monday, escalating the trade war between the world's two largest economies.
"With Trump back in the White House, uncertainty and unpredictability are running high. Prolonged trade conflict would slow global growth and hurt demand for industrial metals," analysts at ING Economics said in a report.
A rise in metal inventories in warehouses registered with the Shanghai Futures Exchange also weighed on prices. COPPER stocks surged by 82,979 tonnes to 184,817 tonnes. ZINC inventories rose by 17,811 tonnes to 39,592 tonnes and LEAD stocks increased by 640 tonnes to 40,017 tonnes.
The yuan fell 0.3% to 7.304 against a dollar, making dollar-denominated base metals expensive for Chinese buyers. The country is the biggest producer and consumer of base metals.
Further downside in base metals prices was prevented by positive economic data from China. Consumer inflation in China rose for the first time since August on the back of higher spending in the lead up to the Lunar New Year, according to the National Bureau of Statistics. The consumer price index rose 0.7% on month in January, higher than Reuters' estimate of 0.4%. On a yearly basis, the index was up 0.5% in January, slightly higher than the 0.4% rise forecast in a Reuters poll.
At 1759 IST, on the MCX, the February futures contract of:
–Aluminium was steady at INR 257.70 a kg
–Copper was at INR 863.90 a kg, down 0.4%
–Lead was at INR 179.20 a kg, down 0.4%
–Zinc was at INR 269.50 a kg, down 0.5%
Trading levels for the day on the MCX:
-Aluminium contract seen at INR 253.90-262.00
-Copper contract seen at INR 851.70-878.00
-Lead contract seen at INR 176.90-181.30
-Zinc contract seen at INR 263.50-274.80
End
US$1 = INR 87.47
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Avishek Dutta
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