Informist, Monday, Mar 28, 2022

By Sandeep Sinha

MUMBAI – Futures contracts of most base metals on the Multi Commodity Exchange of India fell today, taking cues from the London Metal Exchange amid risk aversion, a firm dollar, and concerns around demand with coronavirus cases surging in China.

* A stronger greenback makes dollar-denominated commodities such as base metals expensive for holders of other currencies.

* COPPER inventory at LME-accredited warehouses rose last week to 80,600 tn from 77,600 tn, which is likely to push copper prices down.

* "It seems that demand concerns have gained the upper hand here, at least for the time being, now that the city of Shanghai is going into a two-phase lockdown to tackle a large number of coronavirus cases," Commerzbank AG said in a report. "This will not only hamper logistics chains and thus further reduce supply, but could also delay the upsurge in demand normally observed in March and April."

* Commodities may continue to be driven by developments in the Russia-Ukraine war as in-person talks between Ukrainian and Russian negotiators will resume this week, Kotak Securities said in a note.

* ALUMINIUM prices dropped as traders built fresh short positions on the MCX. The easing of coal prices and expectations of an interest rate hike by the US Federal Reserve also affected prices. 

* NICKEL prices plunged after a Chinese official warning of a crackdown on speculation in raw materials for electric vehicle batteries.

* At 1720 IST, on the MCX, the April futures contract of:

 --Aluminium was at 290.40 rupees, down 0.4%

 --Copper was at 814.25 rupees a kg, down 0.6% 

 --LEAD was at 183.0 rupees a kg, down 0.3%

 --Nickel was at 2,494.6 rupees a kg, down 6.9%

 --ZINC was at 335.75 rupees a kg, down 0.7%

* Outlook for the evening session on the MCX:

 --Aluminium contract seen at 286.5-286.5 rupees per kg

 --Copper seen at 806.0-824.0 rupees per kg

 --Lead seen at 180.0-185.80 rupees per kg

 --Nickel seen at 2,400-2,650 rupees per kg

 --Zinc seen at 330.50–342.0 rupees per kg

End

US$1 = 76.17 rupees

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

Edited by Avishek Dutta

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