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India Base Metals: MCX, LME down on firm dollar; US econ data eyed

Informist, Friday, Jan 28, 2022


By Sandeep Sinha


MUMBAI – Most base metals contracts on the Multi Commodity Exchange of India edged lower tracking cues from the London Metal Exchange, weakness in equity markets, and a strong dollar. 


* US dollar strengthened against a basket of six currencies to 97.37. A firm greenback makes dollar-denominated commodities expensive for foreign holders. 


* Signals that the US Federal Reserve will raise interest rates in March, geopolitical tensions, and concern over inflation continue to weigh on market sentiment.


* Investors will take further cues from US core personal consumer price index yearly and monthly numbers, US Michigan consumer expectations January and US Michigan consumer sentiment January, to be released later in the day.


* ALUMINIUM prices declined on profit booking, ahead of Chinese Spring Festival holidays, and as prices on LME prices slipped below the $3,100 tn level. However, low inventories across exchanges cushioned the downside.  


COPPER prices fell after the US Federal Reserve indicated it could tighten monetary policy at a faster pace than previously anticipated, boosting the dollar. China’s copper production grew by 7.4% year-on-year to 10.5 mln tn in 2021, as per National Bureau of Statistics data.


LEAD contract dropped on unwinding of long positions by traders. Weak demand in China and broader macroeconomic stress also weighed on sentiment.


* At 1710 IST, on the MCX, the January futures contract of

 –Aluminium was at 245.9 rupees a kg, down 0.4%

 –Copper was at 739.4 rupees a kg, down 1.8% 

 –Lead was at 185.05 rupees a kg, down 0.7%

 –Nickel was at 1,715 rupees a kg, down 1%

 –ZINC was at 299.10 rupees a kg, down 0.7%


* Outlook for the evening session on MCX:

 –Aluminium contract seen 243.2-251 rupees per kg

 –Copper contract seen 730-755 rupees per kg

 –Lead contract seen 184-189 rupees per kg

 –Nickel contract seen 1,704-1,747 rupees per kg

 –Zinc contract seen 295–300 rupees per kg



US$1 = 75.04 rupees

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT


Edited by Deepshikha Bhardwaj



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Source: Cogencis

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