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Informist, Wednesday, May 14, 2025

By Ashutosh Pati

MUMBAI – Futures contracts of most base metals rose on the Multi Commodity Exchange of India on Wednesday, tracking a rise in contracts on the London Metal Exchange because of a weak dollar. Market sentiment was further lifted by softer-than-expected US inflation and the trade deal between the US and China, under which both countries will lower tariffs for 90 days.

At 2000 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was down 0.2% at 100.76. 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 US reduced its reciprocal tariff on Chinese goods to 10% from 125%. With the 20% tariffs announced in February and March against Chinese goods remaining in place, the total tariff against Chinese goods will now be 30%. At the same time, China agreed to cut tariffs on US goods to 10% from 125%. On Tuesday, US President Donald Trump said he might personally engage with Chinese President Xi Jinping to work out the final terms of the trade deal.

"The pause in trade tensions has provided relief to industrial metals, which had been under pressure from global growth concerns," Kotak Securities said in a report. Softer-than-expected US inflation data has further boosted sentiment, lifting prices of metals as traders assess the broader economic outlook, Kotak Securities said.

US consumer price index, released Tuesday, showed inflation easing slightly, with the headline annual rate at 2.3% in April, down from 2.4% a month before, and core inflation steady at 2.8%. Monthly CPI rose 0.2%, softer than the expected 0.3%, suggesting limited immediate impact of tariffs.

ALUMINIUM prices rose for the third straight day, supported by strong Chinese demand, tightening supply, and optimism from the recent US-China tariff truce, the report said.

Market participants are waiting for the US producer price index data and a speech by Federal Open Market Committee Chair Jerome Powell, both due Thursday.

At 2023 IST, on the MCX, the May futures contract of:

–Aluminium was at INR 243.50 a kg, up 1.6%

–Copper was steady at INR 860.50 a kg

–Lead was at INR 178.75 a kg, up 0.2% 

–Zinc was at INR 260.65 a kg, up 1.8% 

Trading levels for the day on the MCX:

--Aluminium contract seen at INR 238.20-INR 249.20

--Copper contract seen at INR 848.20-INR 878.00

--Lead contract seen at INR 176.60-INR 180.10

--Zinc contract seen at INR 253.70-INR 265.40

End

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

Edited by Saji George Titus

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