Informist, Thursday, Nov 9, 2023
By Ishan Rathi
MUMBAI – Futures contracts of copper and zinc reversed their losses and rose on the Multi Commodity Exchange of India, tracking those on the London Metal Exchange, on the back of optimism over China’s efforts to support its economy.
After the release of poor economic data from China today, there is optimism in the market that the country will likely announce more stimulus measures to prop up its manufacturing activities. China, the largest consumer and producer of most base metals, re-entered disinflation in October, data showed. Consumer price index inflation shrank at an annualised rate of 0.2% in October, data from the National Bureau of Statistics showed. The reading was in line with expectations, and fell from the 0.0% reading in September.
“The downside is limited as China is making an effort to recover from the slow economy,” said Ajay Kedia, managing director of Kedia Advisory.
Additionally, prices of copper and zinc were supported after data from the US showed that the number of people filling for unemployment claims in the country was at 217,000 in the week ended Saturday, which was in line with expectations. Claims were lower than 220,000 in the previous week. The positive data indicates that the US economy was resilient.
Meanwhile, Codelco, the world’s largest copper producer, offered to sell COPPER at a premium of $89 tn to major Chinese clients for its 2024 contracts, down from this year’s $140 tn.
ALUMINIUM prices were in the red as smelters in China’s south-western Yunnan province started production cuts this week as the hydropower-dependent region entered dry season.
Investors remain cautious as Fed Chair Jerome Powell will appear on a panel discussing monetary policy challenges later today and the recent plunge in yields might prompt him to sound hawkish, said reports from Kotak.
* At 1954 IST, on the MCX, the November contract of:
–Aluminium was at 207.35 rupees a kg, down 0.5%
–Copper was at 705.2 rupees a kg, up 0.2%
–Lead was at 186.85 rupees a kg, down 0.2%
–Zinc was at 228.7 rupees a kg, up 0.1%
* Outlook for the evening session on the MCX:
–Aluminium contract seen at 204.00-209.30 rupees
–Copper seen at 692.00-712.00 rupees
–Lead seen at 184.70-189.20 rupees
–Zinc seen at 224.00-232.00 rupees
End
US$1 = 83.28 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Tanima Banerjee
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