Informist, Monday, Nov 6, 2023
By Ishan Rathi
MUMBAI – Futures contracts of all base metals rose today on the Multi Commodity Exchange of India, tracking those on the London Metal Exchange, as expectation that the US Federal Reserve may not raise interest rates further boosted sentiment. A weaker dollar also supported global prices.
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 104.45.
COPPER prices rose in early Asian trade, driven mainly by positive sentiment in commodities markets after the Federal Reserve hinted that its tightening cycle may be over, Dow Jones Newswires quoted analysts from Nanhua Futures as saying in a note.
On Friday, weaker-than-expected US non-farm payroll data underscored the view that the Federal Reserve may not raise interest rates further in the current rate hike cycle.
“In the short term, copper prices may continue to rise slightly until mid-November amid positive sentiment and low inventories,” Nanhua Futures analysts told Dow Jones. China’s copper exchange inventories fell to a 13-month low, while holdings at bonded warehouses fell to a record low of 23,100 tn, according to the Dow Jones report.
Market participants will now take cues from Federal Reserve Chair Jerome Powell’s speech at the Statistics Centennial Conference in Washington, DC, on Wednesday and China’s CPI data, due on Thursday. China is the world’s top consumer of industrial metals.
However, the red metal, which is used in the power, transportation, and construction sectors, is also facing slower seasonal consumption in the winter, while a patchy economic recovery in China adds to uncertainty in the demand outlook for copper, said Motilal Oswal in its report.
ALUMINIUM prices were up as smelters in China’s south-western Yunnan started production cuts due to a hydropower-dependent region entering the dry season.
ZINC contracts traded higher after The Netherlands-based Nyrstar said it plans to temporarily close two zinc mines in the US.
At 1827 IST, on the MCX, the November futures contract of:
–Aluminium was at 209 rupees a kg, up 0.8%
–Copper was at 713.4 rupees a kg, up 0.5%
–LEAD was at 186.85 rupees a kg, up 0.1%
–Zinc was at 226.8 rupees a kg, up 1.5%
Outlook for the evening session on the MCX:
–Aluminium contract seen at 205.70-211.00 rupees
–Copper contract seen at 702.00-720.00 rupees
–Lead contract seen at 185.00-189.50 rupees
–Zinc contract seen at 222.00-230.00 rupees
End
US$1 = 83.21 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Rajeev Pai
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