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Informist, Wednesday, Apr. 23, 2025

By Ashutosh Pati

MUMBAI – Futures contracts of all base metals rose on the Multi Commodity Exchange of India Wednesday, tracking a rise in contracts on the London Metal Exchange because of weakness in the dollar. Market sentiment was also lifted after US President Donald Trump hinted at the easing of trade tensions with China.

At 1827 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was down 0.6% at 99.08. A weaker dollar makes commodities such as base metals, which are priced in the greenback, cheaper for buyers holding other currencies, hence aiding demand.

Trump said that the US would set the terms of the deal if China does not initiate it and after the negotiations, tariffs on China would fall significantly. "The rally was driven by optimism surrounding US-China trade tensions after President Trump signalled tariffs wouldn't reach the previously feared 145%, though it won't be 0% either, calming markets," Kotak Securities said in a note.

Further, US Treasury Secretary Scott Bessent also said in a closed-door conference that he expected US-China trade tensions to de-escalate. Media reports indicated that the US was in talks with Japan and India for trade deals, which eased investors' concerns about a prolonged global trade war.

A fall in inventories at warehouses registered with the LME also supported prices. ALUMINIUM inventories fell by 6,100 tonnes to 425,600 tonnes and COPPER inventories fell by 7,450 tonnes to 205,250 tonnes. LEAD stocks declined by 4,200 tonnes to 277,075 tonnes and ZINC inventories fell by 7,200 tonnes to 185,025 tonnes.

"Copper, in particular, saw gains amid resilient Chinese demand, despite domestic challenges and global uncertainty. "Speculation around potential US tariffs on copper imports also fuelled bullish bets on tightening supply," Kotak Securities said.

For further cues, market participants await the US flash manufacturing purchasing managers' index, due later in the day.

At 1846 IST, on the MCX, the April futures contract of:

-–Aluminium was at INR 233.30 a kg, up 0.8%

–-Copper was at INR 855.40 a kg, up 0.5%

–-Lead was at INR 175.40 a kg, up 0.3%

–-Zinc was at INR 250.90 a kg, up 1.3%

Trading levels for the day on the MCX:

--Aluminium contract seen at INR 229.40-INR 237.70

--Copper contract seen at INR 837.80-INR 874.90

--Lead contract seen at INR 171.70-INR 177.40

--Zinc contract seen at INR 244.60-INR 255.90

End

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

Edited by Tanima Banerjee

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