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Informist, Tuesday, Apr. 1, 2025

By Ashutosh Pati

MUMBAI – Futures contracts of COPPER rose on the Multi Commodity Exchange of India and the London Metal Exchange Tuesday because of stronger-than-expected manufacturing data from China. Market sentiment was also lifted as a shortage of copper concentrate raised concerns about supply of the red metal.

The Caixin China Manufacturing Purchasing Managers' Index rose to a four-month high of 51.2 in March from 50.8 in the previous month. This marked the sixth successive month in which the index was above the 50.0 mark, signalling an improvement in manufacturing sector conditions. A reading below 50 indicates a contraction in economic activity and a number above 50 signals an expansion.

China's official Purchasing Managers' Index rose to 50.5 in March from 50.2 in February, reaching a 12-month high, according to the National Bureau of Statistics. The official Manufacturing PMI has remained in expansion territory in five of the past six months. China is the top consumer of copper and positive economic data could boost demand for the metal in the country.

Additionally, a shortage of copper concentrate, reflected in declining treatment and refining charges, added to supply concerns, further supporting prices, Kotak Securities said in a note.

However, the gains in copper prices were capped by a firm dollar. At 1740 IST, the Dollar Index, which measures the strength of the greenback against a basket of six major currencies, was up 0.1% at 104.30. A stronger dollar makes commodities such as copper, which are priced in the greenback, expensive for buyers holding other currencies, denting demand.

Moreover, market participants remain worried that a potential trade war could derail global economic growth and hurt demand for metals. The reciprocal tariffs announced by the US is set to take effect from Wednesday, which he refers to as "Liberation Day", with automobile tariffs following on Thursday. Trump has said that higher tariffs could be imposed on the European Union and Canada if they work together to pose economic harm to the US.

For further cues, investors await the US Institute for Supply Management's Manufacturing Purchasing Managers' Index and the US job openings data, both due later in the day.

ALUMINIUM contracts edged lower, taking cues from the LME because of a firm dollar and concerns about demand.

At 1750 IST, on the MCX, the April futures contract of:

-–Aluminium was at INR 244.85 a kg, down 0.6%

–-Copper was at INR 895.00 a kg, up 0.4%

–-LEAD was at INR 179.10 a kg, down 0.1% 

–-ZINC was at INR 268.50 a kg, down 0.5%

Trading levels for the day on the MCX:

--Aluminium contract seen at INR 240.40-INR 249.30

--Copper contract seen at INR 880.30-INR 910.50

--Lead contract seen at INR 175.90-INR 181.10

--Zinc contract seen at INR 264.50-INR 273.20

End

US$1 = INR 85.47

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

Edited by Deepshikha Bhardwaj

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