Informist, Wednesday, Nov 29, 2023
By J. Navya Sruthi
MUMBAI – Futures contracts of most base metals fell on the Multi Commodity Exchange of India and the London Metal Exchange after the Organisation for Economic Co-operation and Development cut the global growth forecast for 2024 to 2.7%, in its latest economic outlook, from 2.9% in the current year. OECD has revised its 2025 growth forecast marginally higher to 3%.
"The tightening of monetary policy needed to tackle inflation is taking effect. Despite stronger-than-expected GDP growth in 2023, tightening financial conditions, weak trade and subdued confidence are taking a toll," said Clare Lombardelli, chief economist, OECD.
Sentiment for non-ferrous metals was also weighed down by ample supply and decreased demand from China, among the biggest consumers.
"Base metals mostly trade lower as a mixed set of US data complicates Fed’s outlook and signs of a fragile economic recovery in China dents demand," Kotak Securities said.
Profits of China's industrial companies rose 2.7% on year in October, significantly lower than the 11.9% increase in September, and 17.2% rise in August, according to data released by the country's National Bureau of Statistics on Monday.
The Economic Sentiment Indicator for the eurozone rose mildly to 93.8 in November from 93.5 last month. "The increase in economic sentiment does not bring much relief but confirms a picture of a mildly contracting economy," ING Economics said in a report.
Investors will watch out for the China official Purchasing Managers' Index data on Thursday.
ALUMINIUM prices fell as traders increased their short positions on the domestic exchange, tracking a sell-off on the Shanghai Futures Exchange. Traders raised their short positions by 28,100 lots on the Chinese exchange.
COPPER prices rose slightly because of an ongoing strike at Peru's Las Bambas copper mine, owned by China's MMG Ltd. The strike was initiated by the workers union, demanding greater profit-sharing and improved transport conditions.
Las Bambas, a significant copper producer, contributed 221,160 tn of copper output from January to September 2023, marking a near 22% increase compared to the same period last year, investing.com reported.
LEAD contracts were down due to profit-taking and a rise in inventory at LME-registered warehouses by 5,945 tn.
ZINC contract fell as stocks rose by 17,025 tn at LME-accredited warehouses, the highest since Sep 16, 2021.
At 1835 IST, on the MCX, the December futures contract of:
–Aluminium was at 202.65 rupees a kg, down 0.4%
–Copper was at 722.20 rupees a kg, up 0.1%
–Lead was at 185.90 rupees a kg, down 0.5%
–Zinc was at 225.45 rupees a kg, down 0.8%
Outlook for the evening session on the MCX:
–Aluminium contract seen at 200.0-205.5 rupees
–Copper seen at 715.0-729.0 rupees
–Lead seen at 183.0-180.0 rupees
–Zinc seen at 222.0-228.50 rupees
End
US$1 = 83.33 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Aditya Sakorkar
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