India Base Metals
All rise on potential US-China trade deal, weak dollar
This story was originally published at 19:48 IST on 20 February 2025
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By Ashutosh Pati
MUMBAI – Futures contracts of all base metals rose on the Multi Commodity Exchange of India, tracking a rise in contracts on the London Metal Exchange because of a weakness in the dollar. Market sentiment was also lifted by optimism surrounding a potential US-China trade deal.
At 1850 IST, the Dollar Index, which measures the strength of the greenback against a basket of six major currencies, was down 0.3% at 106.82. A weaker greenback makes dollar-denominated commodities, such as base metals, cheaper for buyers holding other currencies, improving demand.
US President Donald Trump claimed that the 'very good relationship' he has with his Chinese counterpart Xi Jinping will make it possible to have a new trade deal with China, according to various media reports. China and the US are the major consumers of non-ferrous metals.
A fall in inventories of most base metals at warehouses registered with the LME also supported prices. ALUMINIUM inventories fell 4,050 tonnes to 543,900 tonnes and COPPER inventories fell 2,150 tonnes to 268,750 tonnes. LEAD stocks fell 725 tonnes to 219,100 tonnes. ZINC inventories, however, rose 725 tonnes to 156,275 tonnes.
For further cues, market participants await the US Flash Manufacturing Purchasing Managers' Index, due Friday.
Aluminium contracts traded in the green as the European Union agreed to ban imports of primary aluminium from Russia. EU agreed on a sixteenth package of sanctions against Russia. The package is expected to be adopted by EU foreign ministers Monday, according to various media reports. The ban on imports of aluminium will be phased in a year from the official adoption of the package.
"Although the EU continues to import Russian aluminium, volumes have fallen, with European buyers self-sanctioning since the invasion of Ukraine. Russia now accounts for around 6% of European imports of primary aluminium, half 2022 levels," analysts at ING Economics said in a note.
Zinc and lead prices rose, taking cues from the LME, because of a weak dollar.
At 1916 IST, on the MCX, the February futures contract of:
–Aluminium was at INR 264.55 a kg, up 0.8%
–Copper was at INR 870.00 a kg, up 0.2%
–Lead was at INR 179.85 a kg, up 0.2%
–Zinc was at INR 271.35 a kg, up 1%
Trading levels for the day on the MCX:
-Aluminium contract seen at INR 259.40-INR 270.20
-Copper contract seen at INR 856.40-INR 883.80
-Lead contract seen at INR 178.00-INR 181.50
-Zinc contract seen at INR 266.80-INR 276.50
End
US$1 = INR 86.66
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Deepshikha Bhardwaj
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