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India Base Metals: Most up on supply concerns, China stimulus hopes

Informist, Wednesday, Apr 13, 2022

 

By Sandeep Sinha

 

MUMBAI – Most base metals contracts on the Multi Commodity Exchange of India rose today, taking cues from the London Metal Exchange on improved sentiment, supply risk, inflation concerns and China stimulus hopes.

 

* US consumer price index inflation rose 8.5% in March from 7.9% in February on yearly basis, the highest pace since 1981.

 

* Russian President Vladimir Putin on Tuesday said that the peace talks with Ukraine had hit a dead end, which raises concerns of supply shortages. Russia accounts for 6% aluminium and 7% of global nickel supplies.

 

* Market participants expect the People’s Bank of China to cut the reserve requirement ratio along with interest rates on Friday to support the economy.

 

* “Commodities may remain volatile as market players assess central bank stance, Russia-Ukraine fighting and China’s virus situation,” Kotak Securities said in a report. “Supply risks and hopes of China stimulus may however lend support to commodities at large.”

 

ZINC gained for the fourth day in a row due to a drop in output from top producer China and production cuts in Europe, owing to high energy prices raising concerns over supply shortfalls amid depleting stockpiles. The metal stocks in LME warehouses are at 120,825 tn, the lowest since Jun 2020 and down more than 40% since December.

 

* However, the upside was limited in non-ferrous metals as the dollar index jumped to a new high of 100.50 against a basket of major currencies. A stronger greenback makes dollar-denominated commodities expensive for holders of other currencies.

 

* “We…expect strong inflation data to keep the US dollar higher and this may put some pressure on commodities at large,” Kotak Securities said in a report.

 

COPPER prices rose as traders increased their long positions on the domestic bourse. The decline in production in Chile, the biggest producer in the first two months of the year due to poor ore quality and drought, also supported sentiment.

 

LEAD prices gained on pickup in downstream enquiries and purchases from the battery industry amid light inventories with smelters.

 

* At 1715 IST, on the MCX, the April futures contract of:

 —ALUMINIUM was at 268.60 rupees, down 0.4%

 –Copper was at 821.0 rupees a kg, up 0.2% 

 –Lead was at 186.45 rupees a kg, up 0.1%

NICKEL was at 2,450.0 rupees a kg, down 0.3%

 –Zinc was at 375.25 rupees a kg, up 1.4%

 

* Outlook for the evening session on the MCX:

 –Aluminium contract seen at 265.0-273.0 rupees per kg

 –Copper seen at 814.0-830.0 rupees per kg

 –Lead seen at 182.5-190.0 rupees per kg

 –Nickel seen at 2,250.0-2,700.0 rupees per kg

 –Zinc seen at 371.0–382.0 rupees per kg

 

End

US$1 = 76.17 rupees

 

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

 

Edited by Pranav S. Joshi

 

Cogencis news is now Informist. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to [email protected]

 

© Informist Media Pvt. Ltd. 2022. All rights reserved.

 

Source: Cogencis

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