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Informist, Tuesday, Apr. 22, 2025

By Ashutosh Pati

MUMBAI – Futures contracts of most base metals rose on the Multi Commodity Exchange of India Tuesday, tracking a rise in contracts on the London Metal Exchange as the dollar index slumped to an over-three-year low on Monday after US President Donald Trump began to openly criticise US Federal Reserve Chair Jerome Powell for not lowering the federal funds target rate. Market sentiment was also lifted by signs of improving demand in China, the world's leading metal consumer, analysts said.

"LME base metals opened the week on a strong note after the holiday break, with all metals posting gains amid a sharply weaker US dollar," Kotak Securities said in a report. "The recent dollar rout has provided broad support despite ongoing trade tensions and political uncertainty in the US. This uncertainty is fuelled by President Trump's renewed push for rate cuts and criticism of Fed Chair Jerome Powell." 

On Tuesday, the dollar index, which measures the strength of the dollar against a basket of six major currencies, fell to a low of 98.01, down from 98.32 Monday and also from 99.40 Thursday. A weak dollar makes commodities such as base metals, which are priced in the greenback, cheaper for buyers holding other currencies and aid demand.

A fall in inventories of all base metals at warehouses registered with the Shanghai Futures Exchange also supported prices. ALUMINIUM inventories fell by 15,159 tonnes to 190,468 tonnes and COPPER inventories fell by 11,330 tonnes to 171,611 tonnes. LEAD stocks declined by 5,586 tonnes to 57,060 tonnes and ZINC inventories fell by 5,272 tonnes to 58,585 tonnes.

"Copper has been climbing on a weaker US dollar and early signs of Chinese demand," Dow Jones quoted analysts at SP Angel as saying in a note. "Alternatively, smelters might have hiked output on expectations of improving demand fundamentals from the Chinese property market," the analysts said.

For further cues, market participants await the US Richmond Manufacturing Index, due later in the day.

At 1830 IST, on the MCX, the April futures contract of:

-–Aluminium was at INR 231.75 a kg, up 0.7%

–-Copper was at INR 850.15 a kg, up 0.8%

–-Lead was at INR 175.35 a kg, down 1.3%

–-Zinc was at INR 248.70 a kg, up 0.6%

Trading levels for the day on the MCX:

--Aluminium contract seen at INR 226.60-INR 234.90

--Copper contract seen at INR 827.60-INR 856.50

--Lead contract seen at INR 175.10-INR 177.80

--Zinc contract seen at INR 241.60-INR 253.2

End

US$1 = INR 85.19

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

Edited by Deepshikha Bhardwaj

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