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Informist, Friday, Apr. 11, 2025

By Ashutosh Pati

MUMBAI – Futures contracts of all base metals rose on the Multi Commodity Exchange of India Friday, tracking a rise in contracts on the London Metal Exchange due to a plunge in the dollar index. Market sentiment was also lifted as US President Donald Trump declared a 90-day pause on reciprocal tariffs on all countries except China.

At 1824 IST, the Dollar Index, which measures the strength of the greenback against a basket of six major currencies, was down 1.2% at 99.72. A weaker dollar makes commodities such as base metals, which are priced in the greenback, cheaper for buyers holding other currencies, hence aiding demand.

The dollar index slumped to an over three year low Friday as market participants fear more intense trade war could follow between the world's two largest economies after the US announced a 90-day pause on reciprocal tariffs. Trump said Wednesday that all such countries which did not retaliate against US tariffs would receive a 90-day reprive from such higher tariffs, and would be subject to a 10% tariff for now.

"Commodities have recorded deep losses overall on month amid trade turmoil, though copper and aluminum are on track for weekly gains," Dow Jones quoted Neil Welsh, head of metals at Britannia Global Markets, as saying in a note. "This reflects a surprise tariff reprieve for some countries from US President Trump--though levies on China were hiked to 145%--and optimism that Beijing will offer more stimulus to shield China's economy from the punitive tariffs," Welsh added.

A fall in inventories of all base metals at warehouses registered with the Shanghai Futures Exchange also supported prices. ALUMINIUM inventories fell by 9,447 tonnes on week to 205,627 tonnes in the week ended Friday and COPPER inventories dropped by 42,795 tonnes on week to 182,941 tonnes. LEAD stocks fell by 3,150 tonnes on week to 62,646 tonnes and ZINC inventories declined by 4,686 tonnes on week to 63,857 tonnes.

However, the upside in base metals was restricted due to the threat of a rising trade war. China Friday announced it was increasing tariffs on US goods from 84% to 125%, intensifying the ongoing trade war between the world's two largest economies. The 125% tariff will come into effect on Saturday.

For further cues, market participants await China's trade balance data due Monday.

At 1838 IST, on the MCX, the April futures contract of:

–Aluminium was at INR 235.80 a kg, up 0.8%

–Copper was at INR 837.60 a kg, up 1.3%

–Lead was at INR 178.10 a kg, up 0.4% 

–Zinc was at INR 254.95 a kg, up 0.9%

Trading levels for the day on the MCX:

--Aluminium contract seen at INR 227.90-INR 239.00

--Copper contract seen at INR 801.00-INR 856.00

--Lead contract seen at INR 175.15-INR 179.75

--Zinc contract seen at INR 246.25-INR 259.95

End

US$1 = INR 86.04

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

Edited by Deepshikha Bhardwaj 

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