Informist, Tuesday, May 23, 2023
By Sandeep Sinha
MUMBAI – Future contracts of all base metals fell on the Multi Commodity Exchange of India and the London Metal Exchange on risk aversion and concerns about demand from top consumer China amid a surge in fresh COVID-19 cases in the country.
According to Chinese media reports, the country’s COVID-19 cases could reach 40 mln a week by the end of May and 65 mln a week in June, which could hurt non-ferrous metals demand.
The dollar index today climbed to a fresh eight-week high of 105.50 against a basket of major currencies on safe-haven appeal. A firm greenback makes dollar-denominated commodities expensive for holders of other currencies.
“A sea of red across the commodity and financial space–base metals seeing further onshore speculative selling with most of the metals seeing open interest expansion onshore and shorts building,” Al Munro at broker Marex said in a note.
The Eurozone Composite Purchasing Managers’ Index fell to 53.3 in May from 54.1 in April on a fall in new orders, indicating weakening in the manufacturing sector. The block is one of the biggest users of base metals.
Investors will take further cues from the US flash manufacturing and services PMI to be released later today. They will also watch out for minutes of the US Federal Open Market Committee’s meeting on Wednesday.
ALUMINIUM prices fell as investors liquidated long positions on the domestic exchange.
COPPER prices slipped on demand concerns and a rise in stocks by 2,775 tn at LME-accredited warehouses.
LEAD contracts fell as LME-approved warehouses’ inventory rose by 300 tn to 34,475 tn. Traders raising their short positions on the MCX also weighed on prices.
ZINC contracts hit a 52-week low on the domestic exchange because of rising production and weak demand. The metal is trading below key averages on the daily chart and the momentum oscillator Relative Strength Index was at 24.55, indicating oversold levels that may see a technical rebound.
* At 1725 IST, on the MCX, the May futures contract of:
–Aluminium was at 207.35 rupees a kg, down 0.8%
–Copper was at 706.80 rupees a kg, down 1.5%
–Lead was at 182.30 rupees a kg, down 0.5%
–Zinc was at 216.50 rupees a kg, down 2.1%
* Outlook for the evening session on the MCX:
–Aluminium contract seen at 204.0-209.50 rupees
–Copper seen at 701.0-714.0 rupees
–Lead seen at 180.0-184.50 rupees
–Zinc seen at 213.0–219.0 rupees
End
US$1 = 82.79 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Rajeev Pai
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