Informist, Friday, Jun 30, 2023
By Sandeep Sinha
MUMBAI – Futures contracts of most base metals rose today on the Multi Commodity Exchange of India and the London Metal Exchange because of weakness in the dollar. However, further upside was restricted by weak economic data from China.
The dollar index, which measures the strength of the greenback against a basket of six major currencies, was down 0.3% at 103.6. A weaker greenback makes dollar-denominated commodities such as non-ferrous metals cheaper for holders of other currencies.
Data released by China’s National Bureau of Statistics showed the country’s manufacturing sector remained in contraction for the third consecutive month. China’s official manufacturing Purchasing Managers’ Index rose to 49 in June from 48.8 in May. A reading below 50 signals contraction in economic activity while a figure above 50 indicates expansion. China is the world’s biggest consumer of non-ferrous metals.
“There is no end in sight in the near future to the gloomy sentiment surrounding China’s economic recovery,” Thu Lan Nguyen, head of commodity research at Commerzbank, said in a research note. “The Purchasing Managers’ Index for the manufacturing sector has not slid any further; however, it remains below the 50 mark, in contractive territory,” Nguyen said.
ALUMINIUM prices fell on a sharp rise in stocks by 11,925 tn at LME-accredited warehouses and smelters in China’s Yunnan province resuming production.
COPPER prices rose on hopes of further stimulus from China and a fall in stocks by 2,450 tn at LME-registered warehouses.
LEAD contracts gained on short-covering of positions by traders on the MCX.
ZINC contracts rose as traders increased their long positions on the domestic exchange.
* At 1917 IST, on the MCX, the July futures contract of:
–Aluminium was at 195.60 rupees a kg, down 0.4%
–Copper was at 710.70 rupees a kg, up 0.8%
–Lead was at 182.40 rupees a kg, up 0.5%
–Zinc was at 214.25 rupees a kg, up 1.4%
* Outlook for the evening session on the MCX:
–Aluminium contract seen at 193.0-197.20 rupees
–Copper seen at 702.0-715.0 rupees
–Lead seen at 180.0-184.50 rupees
–Zinc seen at 210.20–216.0 rupees
End
US$1 = 82.04 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Rajeev Pai
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