Informist, Monday, Mar 27, 2023
By Sandeep Sinha
MUMBAI – Futures contracts of most base metals on the Multi Commodity Exchange of India and the London Metal Exchange fell due to weak economic data from China and strength in the dollar.
China’s National Bureau of Statistics data showed Jan-Feb industrial profits slumped 22.9% on year due to weak demand and high raw material costs as the country exits from COVID-19 restrictions after three years. While profits of foreign firms fell 35.7%, private sector posted a 19.9% drop, and state-owned companies slipped 17.5% in the first two months of 2023.
The dollar index, which measures the strength of the greenback against a basket of six major currencies, was up 0.1% at 103.06 on safe-haven demand. A firm greenback makes dollar-denominated commodities such as non-ferrous metals expensive for holders of other currencies.
Germany’s Institute for Economic Research Business Climate Index rose to 93.3 in March from 91.1 in February, the sixth successive month of rise. The reading suggests that Europe’s largest economy benefitted from lower wholesale gas prices and the reopening of the Chinese economy.
ALUMINIUM prices moved in a thin band due to a lack of fresh cues and profit-taking by traders on the domestic exchange. The downside in metal was restricted due to a fall in stocks by 4,850 tn at LME-accredited warehouses.
COPPER prices declined because of weak economic data from China which may hurt demand and operation at Peru’s Las Bambas mine is back to a normal level. The sentiment was also hurt by market players increasing their short positions on the MCX.
However, the downside in the red metal was capped due to a decline in stocks by 2,050 tn at LME-approved warehouses and cancelled warrants metal earmarked for delivery are at 40.7% (28,725 tn) of the total 70,600 tn.
LEAD contracts fell due to weak demand from the battery industry, which accounts for 80% of total consumption. The downside was restricted due to a fall in inventory at Shanghai Futures Exchange by 25% on week to 37,537 tn.
ZINC prices gained as market participants increased their long positions on the MCX.
* At 1745 IST, on the MCX, the April futures contract of:
–Aluminium was at 205.50 rupees a kg, down 0.1
–Copper was at 770.50 rupees a kg, down 0.2%
–Lead was at 182.35 rupees a kg, down 0.3%
–Zinc was at 256.0 rupees a kg, up 0.1%
* Outlook for the evening session on the MCX:
–Aluminium contract seen at 203.0-207.50 rupees a kg
–Copper seen at 762.0-778.0 rupees a kg
–Lead seen at 180.0-184.50 rupees a kg
–Zinc seen at 252.80–258.20 rupees a kg
End
US$1 = 82.37 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Maheswaran Parameswaran
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