Informist, Friday, Nov 3, 2023
By Ishan Rathi
MUMBAI - Futures contracts of most base metals rose today on the Multi Commodity Exchange of India, tracking those on the London Metal Exchange as the dollar fell against a basket of major currencies. A weak greenback makes dollar-denominated commodities such as non-ferrous metals cheaper for holders of other currencies, thus increasing their demand.
The dollar index, which measures the strength of the greenback against a basket of six major currencies, was down 0.2% at 105.922.
"The dollar weakened and was set for a weekly decline as traders wagered that the US Federal Reserve was most likely done with interest rate increases, lifting risk sentiment," said Motilal Oswal in their report.
"The combination of the Fed easing the rate hike cycle and China expressing support for the economy is supportive and slightly bullish for metal prices," said SMC in their reports.
China released its industrial profits data today that showed profits surged 11.9% on year in September, backed by gains in August, according to data from the National Bureau of Statistics.
Moreover, the prices of some non-ferrous metals took cues from US factory orders that rose 2.8% in September, more than the forecast of 2.2%. The metric is a leading indicator of production and a rise in factory orders indicates an increase in manufacturing activity. This also supported the demand for metals.
Copper production in Chile, the largest producer, rose by 4.1% on year in September, according to data. This weighed on global prices earlier in the day. Currently, copper prices on the LME are largely flat.
The rise in metal prices came after a downward trend during the past 18 months due to the Fed hiking interest rates, according to Dow Jones.
Market participants will take cues from non-farm employment change data and the unemployment rate from the US scheduled to be released later today.
ALUMINIUM prices were marginally higher as smelters in China's Yunnan province trimmed production due to limited hydropower sources in the dry season.
COPPER prices were down as weak economic data from the largest metal consumer, China, raised concerns over demand.
LEAD contracts traded up, tracking LME prices that rose following the fall in the dollar.
ZINC contracts traded higher after Netherlands-based Nyrstar said it plans to temporarily close two US zinc mines.
At 1631 IST, on the MCX, the November futures contract of:
–Aluminium was at 206.1 rupees a kg, up 0.1%
–Copper was at 708.5 rupees a kg, down 0.3%
–Lead was at 186.7 rupees a kg, up 0.3%
–Zinc was at 221.1 rupees a kg, up 0.1%
Outlook for the evening session on the MCX:
–Aluminium contract seen at 204.00-208.00 rupees
–Copper seen at 701.00-720.00 rupees
–Lead seen at 184.00-188.70 rupees
–Zinc seen at 218.00-226.00 rupees
End
US$1 = 83.28 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Vandana Hingorani
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