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Informist, Thursday, Mar. 27, 2025

By Ashutosh Pati

MUMBAI – Futures contracts of all base metals edged lower on the Multi Commodity Exchange of India and the London Metal Exchange Thursday due to concerns about demand after the US announced fresh tariffs on automobile imports.

US President Donald Trump Wednesday announced a fresh 25% tariff on import of automobiles and auto parts, effective Apr. 3. "What we're going to be doing is a 25% tariff for all cars that are not made in the United States," Trump said at an event in the Oval Office.

"It does seem like that (tariffs) could damage demand for autos and therefore all the metals that are used in autos. So that's hurting copper prices and other base metal prices today," Business Recorder quoted Nitesh Shah, commodity strategist at WisdomTree, as saying.

Moreover, the reciprocal tariffs by the US are set to take effect from Apr. 2. "...investors fear that tit for tat approach increased the risk of broader global trade war, which may have adverse effect on economic growth denting demand for industrial metal," ICICI Direct said in a research report.

Meanwhile, the US' actual GDP rose by 2.4% on year in the fourth quarter of 2024, slightly higher than market expectation of 2.3% growth. The growth, however, was significantly lower than the previous quarter's 3.1% print. The US is one of the top consumers of non-ferrous metals and a slowdown in its economic growth could hurt demand for metals.

However, a fall in the dollar index limited the downside in base metals prices. At 1829 IST, the Dollar Index, which measures the strength of the greenback against a basket of six major currencies, was down 0.4% at 104.27. A weaker dollar makes commodities such as base metals, which are priced in the greenback, cheaper for buyers holding other currencies, hence aiding demand.

For further cues, market participants are waiting for the US personal consumption expenditures price index on Friday.

At 1839 IST, on the MCX, the April futures contract of:

-–ALUMINIUM was at INR 250.55 a kg, down 1.0%

–-COPPER was at INR 902.00 a kg, down 0.9%

–-LEAD was at INR 182.65 a kg, down 0.1% 

–-ZINC was at INR 274.65 a kg, down 0.9%

Trading levels for the day on the MCX:

--Aluminium contract seen at INR 248.40-INR 255.70

--Copper contract seen at INR 888.70-INR 917.90

--Lead contract seen at INR 180.30-INR 184.50

--Zinc contract seen at INR 271.00-INR 279.40

End

US$1 = INR 85.78

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

Edited by Ashish Shirke

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